EMERGING MARKETS-Asian markets rally as geopolitical fears ease; Thai cenbank holds rates

* Bank of Thailand holds rate at a record low * Korean won strengthens 0.8% * Malaysian cenbank cuts growth forecast * All regional currencies, stock (ex-Japan) gain By Harshita Swaminathan March 30 (Reuters) - Asian currencies and equity markets gained on Wednesday as the likelihood of a negotiated resolution to the Russia-Ukraine war boosted risk appetite, while Thailand's central bank stood pat on its key interest rate to support a pandemic-ravaged economy. The Bank of Thailand reduced its growth outlook for 2022 while saying it expected inflation to come in above the target this year before falling back within its 1-3% target range next year. The baht and Thai equities inched marginally higher after the central bank's much-expected decision. "As long as there is no broad inflation pressure, just energy and foods prices that rise sharply, I think the MPC will feel less concerned about inflationary pressures. So they will mainly focus on economic outlook i.e. when Thailand's economy will recover from the COVID-19," said Poon Panichpibool, a markets strategist at Krung Thai Bank. Late on Tuesday, negotiators from Russia and Ukraine met in Istanbul, where Moscow promised to scale back military action around Kyiv and another city, and Ukraine proposed adopting a neutral status. The positive news sent global markets rallying, and Asian currencies and stocks tracked the cues to climb higher. Emerging currencies stood to benefit as the U.S. dollar fell on shedding some of its safe-haven appeal. "There's certainly not a sense that there's a deal at this point in time, but at least there seems to be positive noise," said Mitul Kotecha, senior EM strategist at TD Securities. South Korea's won strengthened 0.8% to over a one-week high of 1,209.6 to the dollar, and the Indian rupee firmed 0.2%, leading the pack of emerging Asian currencies. Malaysia's ringgit strengthened 0.3% as investors appeared to show scant reaction to the central bank's decision to cut economic growth forecast. Meanwhile, the yield on two-year U.S. Treasury notes briefly overtook the yield on the benchmark 10-year overnight, inverting the yield curve and again raising fears of a recession. Yields on Singapore's benchmark 10-year bond tracked U.S. peers lower, losing 77 basis points to 2.361%. Yields in Indonesia moved 3 basis points lower, while those in the Philippines were flat. Among equities, Chinese stocks surged 1.7%, set for their best day in about two weeks as property firms led the gains. Kotecha also attributed some of the strength in equities to the global sell-off in bond markets. Stocks in India surged 0.9% while shares in the Philippines and Indonesia climbed 0.6% and 0.3%, respectively. HIGHLIGHTS: ** Japan's yen gains 0.8% as central bank may intervene to help currency's weakness ** Debt-embattled Chinese property developer China Evergrande Group says it will sell a project in Hangzhou, China for $575 million to two state-owned firms Asia stock indexes and currencies at 0659 GMT COUNTRY FX RIC FX FX INDEX STOCKS STOCKS DAILY % YTD % DAILY % YTD % Japan +0.75 -5.62 -0.80 -2.66 China +0.12 -0.02 1.74 -10.44 India +0.23 -1.94 0.92 0.75 Indonesi +0.13 -0.66 0.31 6.87 a Malaysia +0.29 -0.86 0.02 1.03 Philippi +0.00 -1.89 0.61 0.50 nes S.Korea +0.84 -1.72 0.21 -7.75 Singapor +0.16 -0.38 0.15 10.10 e Taiwan +0.78 -2.98 1.09 -2.63 Thailand +0.81 +0.18 0.55 2.49 (Reporting by Harshita Swaminathan; Editing by Sherry Jacob-Phillips)