EMERGING MARKETS-Asian currencies, stocks retreat after Fed's 'hawkish pause'

* Fed keeps policy rate steady but signals further hikes * China's economy stumbled in May after weak data * Chinese yuan at near 7-month low By Rishav Chatterjee June 15 (Reuters) - Asian currencies fell against the U.S. dollar on Thursday as investors responded to the Federal Reserve's "hawkish pause" with a sell-off, because it pointed to the greenback being stronger for longer against the risk-sensitive assets. In Asia, the South Korean won declined up to 0.6%, while Japan's yen was the worst loser, slipping 0.7% to its lowest since November 2022. The Fed left its benchmark funds rate window at 5-5.25%, but in what some analysts called a "hawkish pause" it signalled borrowing costs would increase by another 50 basis points (bps) by December-end. The dollar index rose 0.28% to 103.21, recovering from a four-week low of 102.66 on Wednesday. "The conclusion of the June meeting has seen the Fed keeping rates on hold at in a widely-anticipated move, but there is less conviction for markets that this will mark the end of the tightening campaign," IG Research analysts said in a note. Amid risk-off sentiment, the Thai baht weakened as much as 0.5% to mark its worst day in more than a week. Krystal Tan, an economist at ANZ, said the baht has been an underperformer within Asia due to heightened political uncertainty. "This trend is likely to continue until we get more clarity on the timing and shape of the new government formation and political uncertainty abates," Tan said. The Philippine peso declined up to 0.4%. The country's central bank deputy governor said the Fed's monetary policy actions are now seen as less of a factor for its decision-making. The Philippine central bank, which is set to meet on June 22, kept its benchmark interest rate steady at its last policy meeting as inflation remained on track to ease back towards target range. Meanwhile, China on Thursday reported lower-than-expected industrial output and retail sales growth, indicating weak economic growth last month. China's yuan slipped 0.2%, touching a fresh near seven-month low, while equities in Shanghai advanced slightly. "Recent cuts to China's short-term borrowing costs may drive hopes of a similar adjustment to the one-year medium-term lending facility rate today, with the upcoming economic data likely to add to the recent series of downside surprises in China," according to the IG analysts. Meanwhile, equities in the region were largely mixed, with stocks in Indonesia and the Philippines falling 0.4% and 0.5% respectively, while shares in Singapore and China advanced 0.6% and 0.2% respectively. HIGHLIGHTS: ** China's economy stumbled in May with industrial output and retail sales growth missing forecasts ** Thailand to hike more as interest rates not neutral yet - C.bank ** Singapore's Q1 total employment expanded by 33,000 Asia stock indexes and currencies at 0417 GMT COUNTRY FX RIC FX FX INDE STOCK STOCK DAILY YTD % X S S YTD % DAILY % % Japan -0.77 -7.13 <.N2 0.60 29.14 25> China EC> India -0.13 +0.63 <.NS -0.11 3.48 EI> Indones -0.27 +4.22 <.JK -0.27 -2.47 ia SE> Malaysi -0.30 -5.03 <.KL -0.33 -7.67 a SE> Philipp -0.29 -0.66 <.PS -0.57 -2.57 ines I> S.Korea 11> Singapo -0.22 -0.31 <.ST 0.53 -0.49 re I> Taiwan -0.08 -0.12 <.TW 0.56 22.61 II> Thailan -0.39 -0.67 <.SE -0.16 -6.59 d TI> (Reporting by Rishav Chatterjee in Bengaluru; Editing by Jamie Freed)