EMERGING MARKETS-Asian markets up as investors see recovery signs, dollar retreats

* The Philippines and Singapore lead gains in Southeast Asia * U.S. inflation rose more than expected in July * Malaysia releases GDP data on Friday By Nikhil Nainan Aug 13 (Reuters) - Asia's emerging currency markets crept higher on Thursday against a broadly weaker U.S. dollar, while optimism among investors over an economic recovery and U.S.-China trade talks later this week pushed stock markets higher. U.S. inflation data on Wednesday dispelled concerns about deflation in the world's largest economy and added to signs at the start of this week that China is recovering from the coronavirus crisis faster than previously thought. Stock markets in the Philippines and Singapore led gains across the region, climbing to late-July highs, while Taiwan's dollar rose almost half a percent. "We could be in the early innings of a reflationary theme in markets," said Wei Liang Chang, a macro strategist at DBS. "This should lift risky assets such as equities, support inflation hedges such as gold, as well as catalysing a broader drop in the dollar." Kuala Lumpur rose nearly 1% ahead of second-quarter gross domestic product numbers due on Friday, which are expected to show a contraction for the first time in more than a decade. All eyes are on an update of Beijing and Washington's Phase 1 trade pact due this weekend, with a number of analysts arguing that moves by U.S. President Donald Trump against Chinese social media companies may prove to be in place of economically damaging trade tariffs. White House economic adviser Larry Kudlow said on Wednesday the trade deal was "fine right now". "U.S.-China relations will always pose risks to Asia, but so long as the threat of new tariffs does not return, markets can tolerate the circumscribed and limited moves that have been enacted this year," DBS' Chang said. Both Chinese stocks and the yuan were flat to marginally lower. HIGHLIGHTS: ** Top gainers in Singapore include Genting Singapore Ltd, Jardine Strategic Holdings Ltd and Sembcorp Industries Ltd ** Malaysia GDP likely fell 10% in April-June - Reuters Poll ** Indonesian 3-year benchmark yields down 1.9 basis points to 5.239% Asia stock indexes and currencies at 0739 GMT COUNTRY FX RIC FX FX INDEX STOCKS STOCKS DAILY % YTD % DAILY % YTD % Japan +0.23 +1.85 1.78 -1.72 China -0.06 +0.29 0.04 8.87 India -0.07 -4.67 -0.03 -7.10 Indonesia -0.20 -5.67 0.19 -16.77 Malaysia +0.02 -2.41 1.04 -1.01 Philippines +0.26 +3.79 1.71 -21.98 S.Korea +0.17 -2.27 0.21 10.91 Singapore +0.07 -1.94 1.43 -19.33 Taiwan +0.46 +2.38 0.73 6.38 Thailand +0.10 -3.61 0.73 -14.77 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Ana Nicolaci da Costa and Amy Caren Daniel)