EMERGING MARKETS-Philippine peso, equities steady after cenbank holds rates

(Updates as at 0704 GMT) * Most Asian currencies largely unchanged * Philippine c.bank holds rates steady * Philippine c.bank says rate cut in August is possible * U.S. PCE inflation data in focus By Roshan Thomas June 27 (Reuters) - The Philippine peso and equities in Manila maintained their modest gains after the central bank kept its interest rate unchanged on Thursday as widely expected, while shares in South Korea fell to mark their sharpest decline in over two weeks. The Philippine peso, which rose modestly before the decision, was steady after the Bangko Sentral ng Pilipinas (BSP) maintained its policy rate for a sixth straight meeting, as expected in the Reuters poll. Equities in the country advanced slightly up to 1.2% to touch their highest level in more than a week, and were on track to log their fourth straight day of gains. The central bank, however, added that its next move could likely be a rate cut as it expected inflation to slow after a government order slashing tariffs on rice takes effect. "We see the risk of further upside pressure on the PHP if the central bank chooses to cut rates much ahead of the Fed," said Alan Lau, FX strategist at Maybank. Elsewhere, South Korean shares tumbled more than 1%, rattled by disappointing forecasts from U.S. chipmaker Micron. Regional currencies showed limited movement, with the Indonesian rupiah and the Malaysian ringgit slightly weaker against the dollar, which remained near a two-month peak ahead of the U.S. inflation data due on Friday. A robust inflation print would delay expectations of interest rate cuts, bolstering the dollar and putting pressure on emerging market assets. The data would likely be relatively benign, according to Eugene Yuming Leow, a rates strategist at DBS. "This could perhaps ease some of the headwinds for EM (emerging market) assets." As the first half of 2024 draws to a close, most Southeast Asian currencies are deep in the negative territory, with the Thai baht and the Indonesian rupiah emerging as the worst performers. "Investors are constantly on the lookout for better returns on their investments," said Ruben Carlo O. Asuncion, chief economist at the Union Bank of Philippines. "With the U.S. Fed projecting to potentially cut lesser than expected for this year, one would expect investment value slanting toward USD-denominated investments." Stocks in Taiwan, which soared last week in tandem with their U.S. peers riding on the Nvidia wave, fell as much as 1%. Chipmaking giant TSMC down more than 1%. In China, the Shanghai composite index lost 0.8%, while shares in Thailand lost 0.7%. In contrast, equities in Indonesia and Singapore were up 0.8% and 0.4% respectively. HIGHLIGHTS: ** Indonesian 10-year benchmark yields tick higher to 7.124% ** Japan finance minister says concerned over weak yen impact on economy ** Japanese yen languishes near a 38-year low; struggles on weaker side of 160/dollar ** South Korea to extend won trading hours from Monday Asia stock indexes and currencies at 0704 GMT COUNTRY FX FX FX INDEX STOCKS STOCKS RIC DAILY % YTD % DAILY % YTD % Japan +0.24 -12.06 0.82 17.56 China -0.03 -2.35 -0.85 -0.93 India +0.11 -0.32 0.47 10.36 Indonesia -0.07 -6.20 0.67 -4.41 Malaysia -0.15 -2.69 -0.41 8.92 Philippines +0.15 -5.82 1.23 -0.92 S.Korea +0.21 -7.06 -0.29 4.85 Singapore +0.10 -2.79 0.36 3.19 Taiwan +0.00 -5.58 -0.35 27.75 Thailand +0.09 -7.37 -0.63 -7.42 (Reporting by Roshan Thomas in Bengaluru; Editing by Jamie Freed and Janane Venkatraman)