* South Korean won posts best day since March 23
* Philippine shares post biggest gain in 3 weeks
* Investors await Indonesia's interest rate decision

By Navya Mittal
       Aug 24 (Reuters) - Asia's emerging market currencies
strengthened on Thursday, boosted by a retreat in U.S. bond
yields after indicators signalled slowing inflation, clouding
the interest rate outlook for the world's largest economy.
    The Indonesian rupiah and Malaysian ringgit
appreciated 0.3% each. The South Korean won rose
1.5%, its best day since March 23.
    Soft manufacturing surveys had fanned hopes that central
banks globally may be done tightening, however that may change
depending on what clues Federal Reserve Chairman Jerome Powell
gives about interest rates at the annual central bank summit in
Jackson Hole on Friday.
    Robert Carnell, regional head of research, Asia Pacific at
ING, sees an impact on treasury yields across the curve,
especially among longer-dated bonds where yields have been
lifted by higher for longer rate expectations.
    "If we can start seeing more easing price back in there as
the macro economy shows more signs of softening ... we can see a
softer dollar," Carnell said 
    Investors are also on the lookout for interest decision from
Indonesia later in the day, which is expected to stand pat for
the seventh consecutive meeting.
    Meanwhile, South Korea's central bank held rates steady for
the fifth straight meeting but kept a hawkish stance despite
risks of slowing economic growth.
    "Given that the negative rate gap between Korea and the U.S.
is the widest on record ... Bank of Korea will probably be quite
cautious about pivoting ahead of the US Fed without a robust
improvement in Korea's external position," said analysts at ANZ
in a note.
    Equities across the region bumped higher, with stocks in
Manila jumping 1.2%, its sharpest gains in three weeks.
Shares in Malaysia and South Korea rose 0.3% and
nearly 1%, respectively. 
    
    
   HIGHLIGHTS 
    ** ANALYSIS-After limbo, Thailand's new prime minister faces
weakened economy
    ** Indonesian 10-year benchmark yields are down 2.6 basis
points at 6.588%
    ** Sri Lanka c.bank holds rates; imposes lending caps on
some sectors
    
     
  Asia stock indexes and                            
 currencies at 0415 GMT                        
 COUNTRY  FX RIC        FX    FX  INDE  STOCK  STOCK
                     DAILY   YTD     X      S  S YTD
                         %     %        DAILY      %
                                            %  
 Japan               -0.11  -9.5  <.N2  0.39   24.96
                               7  25>          
 China                       0  EC>          
 India               +0.27  +0.3  <.NS   0.54   7.98
                               2  EI>          
 Indones             +0.26  +2.0  <.JK   0.00   1.03
 ia                            7  SE>          
 Malaysi             +0.30  -5.1  <.KL   0.25  -3.46
 a                             7  SE>          
 Philipp             -0.06  -1.7  <.PS   1.20  -4.76
 ines                          1  I>           
 S.Korea                     8  11>          
 Singapo             +0.07  -0.8  <.ST   0.18  -2.20
 re                            7  I>           
 Taiwan              +0.49  -3.3  <.TW   0.78  18.17
                               5  II>          
 Thailan             +0.07  -0.8  <.SE   0.76  -6.46
 d                             7  TI>          
 


    
 (Reporting by Navya Mittal in Bengaluru. Editing by Sam Holmes)