EMERGING MARKETS- Asian FX tread cautiously as US inflation data looms; stocks mixed

(Updated at 0658 GMT) * Malaysian ringgit hits 2-month high * Taiwanese dollar at 5-week high * Taiwan stocks surge to a record high level * US April CPI seen rising 0.3% m/m By Poonam Behura May 15 (Reuters) - Asian currencies were largely stable and stocks mixed amid cautious trading on Wednesday, as focus remained on the upcoming U.S. inflation data, which is expected to steer the Federal Reserve's monetary policy in the near term. Leading gains in Asian currencies, the Malaysian ringgit rose 0.3% to touch its highest in nearly two months. It has gained about 0.8% against the U.S. dollar so far this month. Analysts at MUFG said investor sentiment towards Malaysian assets has "appeared to improve on the back of ebbing geopolitical tensions in the Middle East." Market participants now await first-quarter gross domestic product data due on Friday for further direction. A Reuters poll showed the Malaysian economy likely grew at its fastest annual pace in a year last quarter. Meanwhile, a weaker dollar following mixed U.S. producer price data provided some relief to investors in Asia. The dollar index was last down 0.1% at 104.943. Investors were wary ahead of the April U.S. core inflation data due later in the day. The report is expected to show CPI rose 0.3% month-on-month in April, down from a 0.4% growth in March, according to a Reuters poll. Taiwan's stock index, which has been among the top gainers this year, surged to a record high of 21,308.320, supported by bullish investors. The index was last up 0.8%. The Taiwanese dollar advanced 0.4%, posting its biggest intraday rise since April 12. The Philippine peso also added 0.4% after a seven-session slide, while the country's benchmark stock index edged 0.8% lower, ahead of the central bank's policy decision on Thursday. The Bangko Sentral ng Pilipinas is expected to maintain the status quo on interest rates. In China, the central bank left its key policy rate unchanged in line with market expectations, as it focussed on stabilising the yuan. The yuan inched up 0.1% after a three-session losing streak. Stocks in Shanghai, however, dropped 0.6% as investors assessed new U.S. tariffs on Chinese electric vehicles and other strategic sectors and the latest domestic economic data. Equities in Thailand and Singapore eased 0.5% and 0.7%, respectively. Indonesia's stocks rose 1.3% after the country posted a better-than-expected trade surplus for April. Markets in Hong Kong and South Korea were closed for public holidays. HIGHLIGHTS ** Thai April consumer confidence falls for second month ** U.S. Fed's Powell expects inflation to fall, though not as confident as before ** Argentina cuts rates again as inflation crests near 300% Asia stock indexes and currencies at 0658 GMT Japan +0.05 -9.77 <.N22 5> 0.077 15.31 China +0.09 -1.78 <.SSE -0.59 5.12 C> India +0.01 -0.35 <.NSE -0.02 2.22 I> Indonesia +0.12 -4.20 <.JKS 1.25 -1.39 E> Malaysia +0.34 -2.36 <.KLS 0.01 10.41 E> Philippines +0.43 -3.82 <.PSI -0.79 1.64 > S.Korea -5.92 <.KS1 2.83 - 1> - Singapore +0.14 -2.27 <.STI -0.72 1.52 > Taiwan +0.44 -4.77 <.TWI 0.77 17.94 I> Thailand +0.05 -6.50 <.SET -0.47 -3.23 I> (Reporting by Poonam Behura in Bengaluru; Editing by Subhranshu Sahu and Eileen Soreng)