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EMERGING MARKETS-S. Korean won hit by virus fears; Asian stocks lower on profit taking

 (.)
    * Malaysian shares set to end six-week winning streak
    * S. Korean won hits more than two-week low
    * Taiwan dollar hovers close to 23-year peak 

    By Shriya Ramakrishnan
    Dec 18 (Reuters) - The won led declines among Asian
currencies on Friday after South Korea reported another jump in
COVID-19 cases, while regional stocks fell as investors cashed
in on gains heading into the holiday season. 
    Even as the U.S. dollar looked set for its worst week in a
month, trading in most regional currencies was muted, with the
Indonesian rupiah, Philippine peso and Malaysian
ringgit flat against the greenback.
    The won weakened 0.5% as South Korea reported
1,062 new COVID-19 cases on Friday, the second-highest daily
figure since it confirmed its first infection in January.

    South Korea had managed to keep cases relatively low during
the previous two waves of infection, but the third wave has
proven far more challenging, and the government has said it may
have to impose harsher restrictions on business activity. 
    "The near-term outlook for KRW remains contingent on how
well South Korea can contain the latest wave of domestic
COVID-19 cases," said market analyst Han Tan at FXTM.
    "Still, a dampened won might ensure the nation's exports
remain competitive."
    Malaysian shares were among the worst hit in the
region, sliding 1.3% with the financial and consumer sectors
accounting for most of the losses. The benchmark index was set
to snap six straight weeks of gain. 
    Philippine shares fell 1%, a day after the central
bank left key interest rates steady at its policy meeting. 
    "There is a bit of profit taking rather than any change in
sentiment. Investors are still fairly constructive next year for
Asian emerging markets," said Mitul Kotecha, senior EM
strategist at TD Securities.
    Signs of a rapid recovery in China, a liquidity glut and the
hunt for yields has seen foreign investors rush back to Asian
equities after a pandemic-induced selloff earlier this year. 
    The hefty capital inflows have driven large shifts in
currency markets, leading to concerns among central banks of
some of the export-reliant Asian economies. 
    The U.S. Treasury on Thursday added India, Thailand and
Taiwan to a watch list of countries it suspects may be
deliberately devaluing their currencies against the dollar.

    "The U.S. Treasury report might just give central banks some
pause for thought," Kotecha said "If anything that just means
even stronger Asian currencies because they might think twice
about aggressively intervening by buying dollars."
    The Taiwanese dollar climbed 1.3% and held close to
a 23-year peak hit on Thursday, as its central bank raised its
growth outlook for the year.
    
    HIGHLIGHTS:
    ** Thailand's 10-year government bond yields are down 3.50
basis points at 1.215%
    ** Top losers on FTSE Bursa Malaysia KL Index
include Public Bank Bhd down 3.63% at 20.72 ringgit;
Genting Bhd down 2.93% at 4.64 ringgit
    ** In the Philippines, top index losers are SM Investments
Corp down 3.02% at 1061 pesos; Robinsons Retail Holdings
Inc down 2.57% at 153 pesos
    
 Asia stock indexes and                                       
 currencies at 0427 GMT                                 
 COUNTRY   FX RIC        FX     FX        INDEX  STOCK  STOCKS
                      DAILY  YTD %                   S   YTD %
                          %                      DAILY  
                                                     %  
 Japan                -0.31  +5.02               -0.13   13.17
 China     <CNY=CFXS  -0.09  +6.46                0.13   11.78
           >                                            
 India                 0.00  -3.01               -0.41   12.46
 Indonesi             +0.04  -1.42                0.14   -2.82
 a                                                      
 Malaysia             -0.05  +1.34               -1.31    4.01
 Philippi             -0.03  +5.42               -0.97   -7.52
 nes                                                    
 S.Korea   <KRW=KFTC  -0.52  +5.22                0.11   26.20
           >                                            
 Singapor             -0.11  +1.33               -0.14  -11.44
 e                                                      
 Taiwan               +1.25  +7.02                0.11   18.99
 Thailand             +0.17  +0.44               -0.29   -6.35
 
 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by
Christopher Cushing)
  
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