HONG KONG, Feb 27 (Reuters) - Optimism around revitalized Japan stocks has driven significant inflows so far this year to U.S.-listed Asian stocks, Morgan Stanley said in a note to clients.

Global institutional investors, led by U.S. and European hedge funds, net bought $20.4 billion of Asian equities traded in the U.S., on track for record high quarterly net inflows, the note dated Feb. 26 said.

Most quarters in the past four years recorded net outflows from Asian ADRs (American Depositary Receipts).

The majority of purchase in the first two months of this year were in broader U.S.-listed Japanese stocks, including banks and automobiles.

Japan's Nikkei soared to an all-time high last week, breaking levels last seen in 1989 when the country was in the middle of "bubble economy", as cheap valuations and corporate reforms lured foreign money looking for alternatives to battered Chinese markets.

MUFJ Financial , Sumitomo Mitsui Financials , Nomura Holdings , Honda Motor , and Takeda Pharmaceutical topped purchases among Asian ADRs, Morgan Stanley said.

Meanwhile, on the selling side, Indian and Singaporean companies traded in the U.S. suffered the most, the bank said, while flows to China were mixed.

Investors believe stable inflation and wage hikes, seen for the first time in decades, will be the key drivers this year to further attract foreign funds into Japanese equities.

Asia's second largest economy on Tuesday posted a 2.0% gain in the core consumer prices index (CPI) for January, slower from December but beating forecasts, and held at the central bank's 2% target.

"We are still at the very beginning innings for foreign fund inflows," said Kei Okamura, portfolio Manager on Japanese equities at Neuberger Berman, adding that valuations are still cheap and foreign inflows are still far from the 2015 peaks. (Reporting by Summer Zhen; Editing by Varun H K)