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EMERGING MARKETS-Thai baht extends losses, other Asian FX steady

* Thai baht hits 10-month low * Dollar firm at 10-month high * Asia stocks largely gain * U.S. 10-year yields highest since Oct 2007 By Roushni Nair Sept 28 (Reuters) - Thailand's baht slumped to its lowest in more than 10 months on Thursday, depressed by persistent worries over its fiscal outlook, while other Asian currencies managed to steady after recent losses against a rallying dollar. The baht fell as much as 0.3% as of 0349 GMT, marking its lowest since last November. Several other currencies managed slight gains, with the Philippine peso, China's yuan and the Singapore dollar each up 0.1%. Skittishness over riskier assets, stoked by hawkish Fed rhetoric and the prospects of higher-for-longer U.S. interest rates, has lured investors towards the safety of the dollar, which is trading near a 10-month high against a basket of its peers. U.S. benchmark 10-year yields hit a fresh top of 4.462% overnight, the highest since October 2007. The baht has already lost more than 2.2% against the dollar this week and is set to log its fourth straight session in losses. The Bank of Thailand (BOT) raised its key interest rate for an eighth straight meeting on Wednesday, despite slowing economic growth, below-target inflation and rising global uncertainties. "At any rate, the BOT will not turn dovish in 2023 and 2024. We expect BOT to remain on hold in 2023 with the option for further hikes on the table next year," analysts at OCBC Global Markets Research said in a note. Depreciation in the Thai currency is underpinned by concern over a widening fiscal deficit due to higher spending by the country's new government, which took office last month and is advancing fresh policies to stimulate the economy. The cabinet has approved new borrowing worth 194 billion baht ($5.28 billion) for the 2024 fiscal year for infrastructure development and as part of a wider debt management plan. The currency is also under pressure from an extended rally in oil prices, which could mean higher import bills and worse inflation for the net oil importer. "The growth impact of the government's recently announced policies, including a higher medium-term fiscal deficit and cash handouts, will be weighed against its potential inflationary impact in determining whether further rate hikes are necessary," OCBC added. The Indian rupee traded largely flat but is still hovering around record lows, with the surge in crude oil prices and rising U.S. treasury yields sapping investor confidence in the currency. Markets in Indonesia, Malaysia and South Korea were closed for a public holiday. Shares in the region were largely trading higher, with Singapore and the Philippines each advancing 0.2%. Stocks in China gained 0.1% but sentiment was cautious after the suspension of trading in China Evergrande's shares on reports that its chairman had been placed under police watch. ($1 = 36.7700 baht) HIGHLIGHTS: ** Thai Aug factory output falls 7.5% y/y, more than forecast ** Philippine lower house backs 2024 budget with South China Sea funding ** Thai economy in Aug supported by increased tourism, exports - ministry Asia stock indexes and currencies at 0449 GMT COUNTRY FX RIC FX FX INDEX STOCKS STOCKS DAILY % YTD % DAILY YTD % % Japan +0.17 -12.2 -1.95 23.43 2 China India +0.01 -0.59 -0.10 8.78 Indonesi - +0.32 - 1.27 a Malaysia - -6.50 - -3.70 Philippi +0.14 -2.21 0.23 -2.70 nes S.Korea Singapor +0.10 -2.28 0.22 -1.36 e Taiwan -0.06 -4.83 0.13 15.52 Thailand -0.24 -5.89 0.02 -10.26 (Reporting by Roushni Nair in Bengaluru; Editing by Edmund Klamann)