Most emerging Asian currencies gained on Wednesday, holding onto positive momentum on hopes of a quick economic recovery even as caution set in ahead of a U.S. Federal Reserve policy decision that may see focus turn toward yield curve control.

Investor sentiment has been buoyant as most countries in Asia have started the process of re-opening their economies and U.S. data supported views that an economic recovery is on the cards.

But hopes for a full-fledged recovery still seem a distant possibility. Analysts are eyeing whether the Fed will pledge to keep longer-term interest rates at a specific level in a move more widely known as yield curve control.

"Any slippage on Fed to address the rising UST yield issue could hurt risk assets," analysts at Maybank said in a note.

The Thai baht hit its strongest level since Feb. 17 against the U.S. dollar, while the Taiwanese dollar was at a mid-2018 high.

Markets are also looking for confirmation from the Fed on how long rates will stay where they are, said Sim Moh Siong, a currency strategist at the Bank of Singapore, adding that investors were taking positions ahead of the announcement.

"If the Fed continues to stay dovish and the weaker dollar backdrop holds, there's a bit more scope for the central banks to ease rates and that should be beneficial for the local bond markets," he added.

Plans by the Thailand government to roll out further stimulus to spur growth have been supporting the baht this week.

The Philippine peso advanced 0.4% to 49.846, while stocks fell more than 3%. [.SO]

Imports plunged more than exports in April, narrowing the trade deficit to its lowest in more than five years but pointing to a collapse in domestic economic output. The economy is slated to contract for the first time in more than two decades.

"The widening of the trade gap coupled with the absence of usual dollar inflows from remittances could translate to a swelling of the current account deficit, which could spark renewed depreciation pressure on PHP in 2H," ING said in a note, adding that the peso could weaken just over 52 per dollar by the end of the year.

Meanwhile, the rupiah weakened 0.2% in volatile trade.

Indonesia's central bank said the currency had more room to appreciate, but analysts are worried that the rising number of coronavirus cases may lead to new restrictions.

(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Subhranshu Sahu)