EMERGING MARKETS-Asian stocks, FX tepid ahead of key central bank meetings

* S. Korea, Taiwan shares lead declines * Asian currencies struggle for direction * Indonesian rupiah, Thai baht biggest losers By Roushni Nair July 30 (Reuters) - South Korea and Taiwan stocks fell more than 1% each on Tuesday, leading declines across Asia's emerging markets, while the focus remained squarely on key central bank policy decisions that left already unnerved investors unsure about taking on riskier bets. Currencies in the region were largely range-bound as uncertainty around midweek monetary policy meetings from the Bank of Japan (BOJ) and the U.S. Federal Reserve sent investors scurrying for the safety of the dollar. The dollar index - which measures the currency against a basket of peers - inched up 0.2% to 104.6, while the Indonesian rupiah and Thailand's baht fell more than 0.2% each. Shares in Asia slipped, with those in the Philippines and Indonesia dipping more than 0.7% each, while stocks in Taiwan touched their lowest since June 12. Shares in South Korea fell 1.1%. Traders eased long-held bets against the Japanese yen , helping the frail currency, on mounting expectations the Fed would cut interest rates in the world's largest economy as early as September. The yen, which is among the best-performing currencies this month, is set to add over 4% in value so far in July. It however eased marginally by 0.1% as the BOJ began its two-day meeting on Tuesday. A diverse set of factors has sparked market anxiety over how stretched valuations in Big Tech might be, against a backdrop of rising U.S.-China trade tensions and tepid earnings. "This underscores the benefit of diversification into Asian credit assets, which are less exposed to global equity volatility, and are also not the target of flighty carry trades," Eugene Leow Senior Rates Strategist at DBS wrote. Asian credit's lack of correlation with the yen and tech stocks also suggests that the market is not seeing concentrated positions by hedge funds, Leow added. Investors are awaiting a slew of economic data in the region, including Taiwan's growth figures and China's manufacturing data on Wednesday alongside an inflation reading in Indonesia and South Korea on Thursday and Friday, respectively. Back in the United States, the Fed is widely expected to resort to a dovish hold in its policy decision due on Wednesday, with CME's FedWatch tool showing a 100% chance of a rate cut in September. Declining interest rates in the U.S. would take the shine off the dollar with the rate differential narrowing against emerging Asian nations, and boost their currencies. HIGHLIGHTS: ** Indonesian 10-year benchmark yields rise 2.5 basis points to 6.936% ** Japan June labour data mixed and shrugged off by a market focused on the BOJ Asia stock indexes and currencies at 0301 GMT COUNTRY FX RIC FX FX INDEX STOCK STOCK DAILY YTD % S S YTD % DAILY % % Japan +0.00 -8.41 -0.96 14.46 China India +0.00 -0.62 0.00 14.29 Indones -0.28 -5.67 -0.65 -0.43 ia Malaysi +0.06 -0.95 0.03 11.71 a Philipp +0.02 -5.47 -0.37 2.70 ines S.Korea Singapo -0.04 -1.85 0.06 6.35 re Taiwan +0.03 -6.47 -1.39 21.89 Thailan -0.14 -4.99 0.44 -7.27 d (Reporting by Roushni Nair in Bengaluru; Editing by Sonali Paul)