EMERGING MARKETS-Most Asian assets fall on dollar strength; US inflation data in focus

(Updates at 0655 GMT) * South Korean won tanks 1% * Indonesian stocks hit lowest in a month * Taiwan Q1 GDP to be released later on Thursday By Archishma Iyer May 30 (Reuters) - Most emerging Asian assets weakened on Thursday as higher U.S. Treasury yields boosted the dollar, while investors awaited U.S. inflation data that could decide global monetary policy. The South Korean won tanked more than 1% to trade at 1,379.4 to the dollar, leading the declines among Asia-Pacific currencies. The MSCI International Emerging Market Currency Index lost 0.3% to touch a two-week low. Robust economic data from the world's largest economy in addition to poorly received U.S. bond auctions during the week triggered an exit from risk-sensitive Asian assets. The dollar index, which measures the strength of the greenback against six major rivals, rose overnight and was steady at 105.09 at 0655 GMT. "For one, markets will remain nervous about "higher for longer" Fed proposition hardening if US PCE is also hotter and/or stickier than expected," said Vishnu Varathan, chief economist, Asia ex-Japan at Mizuho Bank. "...EM Asia FX (AXJ) are even more likely to be compromised." Markets have aggressively cut their rate cut forecasts in the face of stubborn inflationary pressures, with traders expecting a 42% chance of a 25 basis point cut at the Fed's September meeting, according to the CME FedWatch tool. The Indonesian rupiah sank 0.6% to hit a one-month low, while the Philippine peso slipped 0.3%, nestled near its November 2022 lows. The Singapore dollar, Thai baht, Malaysian ringgit and the Taiwan dollar traded between 0.1% and 0.5% lower. Thailand's central bank signalled late on Wednesday that it would take action on any excessive move in the currency. The baht is currently down 7.5% on a year-to-date basis and also one of the worst performing units in the region. Indonesia's benchmark 10-year bond yield lingered at a two-week high, while the yield on the 10-year Singapore bond rose as much to 3.365% to touch its highest since May 3. In stock markets, the Jakarta index shed as much as 2.2% to hit its lowest since Nov. 23, while Seoul shares closed 1.6% lower to hit their lowest since late April. Equities in Manila, Taipei, Bangkok and Singapore slumped between 0.2% and 1.4%. Taiwan is set to reveal its first-quarter economic growth figures later in the day. HIGHLIGHTS: ** China's central bank vows to improve transparency, predictability of financial markets ** Thai April factory output unexpectedly rises 3.43% y/y ** Google to invest $2 bln in data centre and cloud services in Malaysia Asia stock indexes and currencies at 0655 GMT COUNTRY FX RIC FX FX YTD INDEX STOCK STOCK DAILY % S S YTD % DAILY % % Japan +0.54 -10.01 -1.30 13.72 China +0.02 -2.08 -0.73 3.81 India -0.06 -0.22 -0.54 3.91 Indonesia -0.62 -5.29 -1.06 -2.86 Malaysia -0.06 -2.44 0.06 10.43 Philippines -0.29 -5.53 -0.97 -1.56 S.Korea -1.04 -6.63 -1.56 -0.75 Singapore -0.07 -2.46 -0.20 2.36 Taiwan -0.46 -5.27 -1.38 19.15 Thailand -0.33 -7.46 -0.45 -5.09 (Reporting by Archishma Iyer; Editing by Jamie Freed and Rashmi Aich)