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EMERGING MARKETS-Asian FX subdued ahead of expected Fed rate hike, shares rebound

* UST yields, dollar's rises weigh on Asian currencies * Recovery on Wall St aided equities in Asia * China kept its benchmark lending rates unchanged By Riya Sharma Sept 20 (Reuters) - Most Asian currencies were subdued on Tuesday as investors braced for a sizeable U.S. Federal Reserve interest rate hike this week to combat inflation, while regional equities edged up tracking a Wall Street rebound. South Korea's won bucked the regional trend to strengthen 0.4% as the currency, described by some analysts as equity-sensitive, gained on a rebound in Asian share markets, while Malaysia's ringgit hit a fresh 24-1/2 year low to lead losses among regional currencies. The U.S. Federal Reserve is expected to raise its policy rate by at least 75 basis points on Wednesday, while investors are also awaiting the central bank's future policy projections. "Asian markets are pretty much in a holding pattern anticipating the Federal Open Market Committee's (FOMC) rate decision. Markets are pricing in a 75 basis points hike, but a 100 basis points increase is also within expectations," said Khoon Goh, head of Asia research at ANZ. Interest rate hikes are expected not only in the United States, but also in Asia, where a number of central banks are meeting this week, with Indonesia and the Philippines expected to raise rates, with the exception of the Bank of Japan, which has shown no signs of renouncing its dovish monetary policy despite the yen's sharp fall. "If the BOJ governor continues to maintain a fairly dovish stance, then that will just accentuate the widening differential between the U.S. and Japan interest rates. And that will put further pressure on the Japanese yen," Goh said. The yen was down 0.1% at 143.38 on Tuesday. Higher interest rates have caused a sell-off in government bonds, with the yield on benchmark 10-year Treasury notes hovering near their highest levels since 2011, on the prospect of the Fed raising rates more aggressively and for a longer period of time than previously anticipated, as inflation remains near multi-decade highs. Higher yields aided the dollar's strength, which remained firm below a two-decade high versus major peers, and the dollar's and yields' persistent rise has weighed heavily on riskier Asian assets. China kept its benchmark lending rates for September unchanged as expected, as authorities appeared to hold off immediate monetary easing following rapid declines in the local currency and as central banks elsewhere tightened policy. The yuan was down 0.1% at 7.0091 on Tuesday. Shares in Asia tracked a rebound in the final hour of New York trading as markets were fully priced for a rise in interest rates this week, with equities in Mumbai leading gains among regional peers, climbing 1.4%. Equities in Kuala Lumpur and Taiwan both rose 0.9%, while shares in Seoul rose 1.1%, eyeing their best day in a week. HIGHLIGHTS: ** Indonesian 10-year benchmark yields are down 1 basis points at 7.199% ** Top gainers on the Singapore STI include Jardine Cycle & Carriage, up 2.18%, and Genting Singapore, up 1.25%. Asia stock indexes and currencies at 0514 GMT COUNTRY FX RIC FX FX INDE STOCK STOCK DAILY YTD % X S S YTD % DAILY % % Japan -0.06 -19.6 <.N2 - - 8 25> China EC> 1 India +0.21 -6.62 <.NS 1.34 2.90 EI> Indones +0.01 -4.83 <.JK 0.00 9.33 ia SE> Malaysi -0.09 -8.52 <.KL 0.86 -6.60 a SE> Philipp -0.03 -11.1 <.PS 0.40 -9.26 ines 1 I> S.Korea 4 11> 8 Singapo +0.05 -4.11 <.ST 0.38 4.65 re I> Taiwan -0.00 -11.6 <.TW 0.83 -20.1 8 II> 6 Thailan -0.11 -9.60 <.SE 0.69 -0.90 d TI> (Reporting by Riya Sharma in Bengaluru; Editing by Muralikumar Anantharaman)