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EMERGING MARKETS-Asian currencies checked by lower yuan after PBOC move, stocks up on stimulus hopes

    * Graphic: World FX rates tmsnrt.rs/2egbfVh
    * Graphic: Foreign flows into Asian stocks tmsnrt.rs/3lKhL5I
    * Yuan falls after PBOC removes reserves for forward trading
    * Rising COVID-19 cases weigh on Malaysian stocks
    * Indonesian stocks gain on easing of coronavirus curbs

    By Shriya Ramakrishnan
    Oct 12 (Reuters) - Most Asian currencies struggled for
traction on Monday as China's yuan pulled back from a 17-month
high after a policy tweak by the central bank, while stock
markets rose on hopes for a new U.S. stimulus package.
    Over the weekend, the People's Bank of China (PBOC) lowered
the reserve requirement ratio for financial institutions when
conducting some foreign exchange forwards trading to zero from
20%, effectively lowering the cost of shorting the Chinese
currency.
    The PBOC move reflects "the Chinese authorities' concerns
with the raging yuan strength," said Jingyi Pan, market
strategist at trading firm IG Asia.
    "That said, this had not been viewed as a significant curb
or attempt to reverse the current stronger yuan trend that
remains supported by fundamentals," Pan added. 
    The Singapore dollar, Malaysian ringgit and
Thai baht hovered near unchanged levels to lower during
the day, while the Taiwan dollar once again stood out
with gains of more than 1%.
    The South Korean won advanced 0.4% in tandem with
gains in the stock market after data showed overseas
sales of semiconductors, the nation's top export item, jumped
11.2% for the first 10 days of October.
    Stock markets in the region were broadly higher, even as
negotiations on U.S. fiscal stimulus ran into resistance, with
the Democrats dismissing the Trump administration's proposal to
pass a stripped-down coronavirus relief bill as inadequate.

    "The fact of the matter remains one where the market
continues to judge the passage for the phase four stimulus to be
expected down the road, even if politics does get in the way for
the time being," IG's Pan said.
    Indonesian stocks climbed as much as 1% to their
highest level in nearly a month, as Jakarta Governor Anies
Baswedan announced the capital city will kick off a two-week
'transitional' period of eased coronavirus curbs.
    Markets barely reacted to protests over a controversial jobs
law that could cut red tape and boost investment for Indonesia's
coronavirus-hit economy. Protesters say the law undermines
labour rights and weakens environmental protections.

    "Although the new labour laws could depress economic
performance in the short term, in the medium to longer run it
will indeed jack up investments and bolster economic growth,"
said Anthony Kevin, macro economist at Mirae Asset Sekuritas
Indonesia.
    Malaysian stocks were down more than 1%, hurt by
concerns over a sharp spike in coronavirus infections over the
past few weeks.
    
    HIGHLIGHTS:
    ** Indonesian 10-year benchmark yields are down
1 basis point at 6.889%
    ** Top losers on FTSE Bursa Malaysia Kl Index
include PETRONAS Chemicals Group Bhd down 1.66% at
5.92 ringgit; CIMB Group Holdings Bhd down 1.58% at
3.11 ringgit
    ** Top gainers on the Singapore STI include
Comfortdelgro Corporation Ltd up 1.38% at S$1.47,
Keppel Corporation Ltd up 1.34% at S$4.55
    
    
  Asia stock indexes and                                     
 currencies at   0407 GMT                              
 COUNTRY   FX RIC          FX     FX     INDEX  STOCK  STOCKS
                        DAILY  YTD %                S   YTD %
                            %                   DAILY  
                                                    %  
 Japan                  +0.11  +2.98            -0.32   -0.48
 China                  -0.40  +3.61             2.27    9.71
 India                   0.00  -2.39             0.71   -1.39
 Indonesi               -0.10  -5.51             0.81  -19.13
 a                                                     
 Malaysia               -0.02  -1.14            -0.91   -4.55
 Philippi               -0.02  +4.74            -0.28  -24.32
 nes                                                   
 S.Korea                +0.40  +0.67             0.47    9.35
 Singapor               -0.12  -0.73             0.64  -20.90
 e                                                     
 Taiwan                 +1.15  +5.13             0.29    7.73
 Thailand               -0.06  -3.73             0.45  -19.43
 


 (Reporting by Shriya Ramakrishnan in Bengaluru
Editing by Shri Navaratnam)
  
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