EMERGING MARKETS-Asian stocks, FX slip ahead of US inflation test

* Taiwan shares lead losses * India's central bank holds key rate steady * Spotlight on key U.S. inflation data By Navya Mittal Aug 10 (Reuters) - Asian currencies and equities traded sideways on Thursday as investors erred on the side of caution ahead of the crucial U.S. inflation report. The Thai baht led losses among currencies in the region, losing 0.5% to give up the modest gains made on Wednesday. The currency had been sliding since July 27 due to a string of disappointing economic data and the finance ministry lowering its 2023 economic growth forecast on tepid global demand for Thailand's exports. The Philippine peso appreciated 0.2% while shares lost over 1% after the economy grew at the slowest pace in nearly 12 years in the second quarter and as the central bank hinted at a 'prudent pause' in monetary tightening. Michael Ricafort, chief economist at Rizal Commercial Banking Corporation, said he sees growth in the region's gross domestic product normalising at 5%-6% levels in the coming quarters. He added he sees a possible 25-basis point interest rate hike in the next policy meeting on Aug. 17, to match with the latest hikes in the U.S., helping the peso stabilise. However, "a pause cannot be completely ruled out given the softer GDP data recently," he said. Equities in the region traded cautiously in line with the weakness in global markets after data from China showed the world's second-largest economy had slipped into deflation. Investors' focus is now locked on the U.S. inflation data due to be released later in the global day. Taiwan shares led losses in the region, falling as much as 1.6% to their lowest in a month, with equities in Thailand and South Korea slipping 0.5% and 0.3% respectively. In India, the central bank, in a widely expected move, held its key lending rate steady for the third straight session but signalled tighter policy as inflation concerns resurfaced. "Concerns over recent supply-led inflation spikes were apparent in the monetary policy committee's and governor's statements, though the committee decided to look through the surge and wait for more incoming data," an analyst at Barclays wrote in a client note. HIGHLIGHTS: ** Japan's July core inflation likely slowed on weaker commodity prices - Poll ** Indonesian 10-year benchmark yields are up 0.2 basis points at 6.336% ** Malaysia's end-July palm oil stocks rise to five-month high Asia stock indexes and currencies at 0624 GMT COUNTRY FX RIC FX FX INDE STOCK STOCK DAILY YTD X S S YTD % % DAILY % % Japan -0.19 -8.9 <.N2 0.93 26.39 5 25> China 1 EC> India -0.02 -0.1 <.NS -0.48 7.91 4 EI> Indones -0.10 +2.3 <.JK 0.17 0.52 ia 7 SE> Malaysi -0.09 -3.7 <.KL -0.35 -2.58 a 6 SE> Philipp +0.15 -1.0 <.PS -1.18 -1.72 ines 0 I> S.Korea 8 11> Singapo -0.03 -0.5 <.ST 0.07 1.99 re 2 I> Taiwan -0.08 -3.3 <.TW -1.40 17.66 6 II> Thailan -0.48 -1.4 <.SE -0.48 -8.85 d 7 TI> (Reporting by Navya Mittal in Bengaluru; Editing by Simon Cameron-Moore and Janane Venkatraman)