EMERGING MARKETS-Singapore shares lead Asia lower as Fed outlook weighs on optimism

* Thai baht at more than 4-month high * Singapore stocks outpace declines in region By Nikhil Nainan June 11 (Reuters) - Led by Singapore, shares in Asia's emerging markets slipped on Thursday, as the U.S. Federal Reserve's forecasts dented hopes that economies would recover more strongly once lockdowns introduced to slow the coronavirus pandemic are lifted. But a drop in U.S. yields sparked a rally in regional currencies and sent the Thai baht to a more than 4-month high. Bank-heavy Singapore led losses, with the Straits Times Index down 2.5%, outpacing drops of less than 1% in Jakarta, Manila and Kuala Lumpur. The Fed forecast the U.S. economy would shrink at 6.5% this year and promised to keep pumping liquidity into markets. Chairman Jerome Powell also raised the prospect of yield curve control, and that pressed down longer tenor U.S. yields and made Asia's higher-paying debt look more attractive. The Thai baht rose as much as 1% to 30.83 per dollar, its strongest since late January, even as the greenback rose against most other currencies on Thursday and benchmark 10-year Thai bond yields fell to a near two-week low. Yields fall when prices rise. "With the Fed outlining a stridently dovish stance in yesterday's FOMC, making clear that rates are likely to remain low for long, investors will be encouraged to pour funds into higher-yielding Asian markets," said Wei Liang Chang, a macro strategist at DBS Bank. While gains were held back by a rising dollar, the Indonesian rupiah and Malaysian ringgit held their ground, with the rupiah at 13,940 per dollar and the ringgit steady at 4.248 per dollar. "Given Indonesia's high bond yields, bond flows are likely to persist, which should anchor bullish rupiah sentiment," said DBS' Chang. In Singapore, interest rate sensitive sectors like banking and real estate stocks led equity declines with CapitaLand down nearly 4% and southeast Asia's biggest lender DBS Group Holdings lost 2.4%. Elsewhere, Philippine shares was down 0.9%, but had come off lows having lost 2.7% loss earlier in the session. In Thailand, where shares have been rallying from multi-year lows struck in March, were down 0.4%. The Singapore dollar failed to join regional currencies' rally, easing 0.4% to S$1.389 per dollar, its steepest fall in almost three weeks. Emerging Asia stock indexes and currencies as at 0458 GMT: COUNTRY FX DAILY % FX YTD % STOCKS DAILY % STOCKS YTD % Japan +0.02 +1.44 -2.21 -4.41 China -0.11 -1.51 0.24 -3.26 India -0.21 -5.76 -0.15 -16.99 Indonesia -0.14 -0.43 -0.51 -22.28 Malaysia +0.02 -3.74 -0.97 -1.81 Philippines -0.06 +1.28 0.57 -17.13 S.Korea -0.35 -3.26 -1.14 -1.23 Singapore -0.41 -3.19 -2.49 -15.27 Taiwan +0.22 +1.54 -1.48 -3.75 Thailand +0.63 -3.38 -0.44 -10.59 (Reporting by Nikhil Kurian Nainan in Bengaluru)