Emerging Asia FX-Underpinned by US inflation data, lower oil

SINGAPORE, Aug 16 (Reuters) Asian currencies rose on Wednesday, some of them after several days of losses against the dollar, following soft U.S. producer price data that reduced expectations of further rate rises by the Federal Reserve.

Another drop in crude oil prices also helped.

The yen rallied more than half a percent to around 116 per dollar. The Singapore dollar and Philippine peso regained the quarter percent they lost on Tuesday.

The Indonesian rupiah was flat around 9,100 a dollar.

The baht was around 37.40/45 per dollar, staying on the weaker side of Friday's 6-1/2-year high of 37.215 per dollar after the Bank of Thailand's verbal intervention on Tuesday.

U.S. core producer prices fell 0.3 percent in July from June, surprising analysts who had expected a rise. Consumer price inflation is due on Wednesday and a similar softening would support the view U.S. rates have peaked.

''Any signs that the Fed was correct to pause this month will be taken as a positive for risky assets,'' ABN AMRO strategist Shahab Jalinoos said in a note.

Asian currencies came under selling pressure earlier this week after robust U.S. retail sales data stoked expectations the Fed might renew a two-year tightening campaign after leaving rates unchanged last week.

''Even as the yen underperforms, higher-yielding currencies like the euro, sterling, Aussie and New Zealand dollar have performed better against the U.S. dollar,'' said Thio Chin Loo, a strategist with BNP Paribas, adding that a listless yen would not stymie gains in the rest of the Asian currencies.

Crude oil, which the region imports in large quantities, fell below a barrel after a U.N.-brokered truce ended fighting between Israel and Lebanon's Hizbollah.

In addition, most of the regional stock markets have seen a pick-up in foreign portfolio inflows. Taiwan's equity market <.tw11> has been a big beneficiary, receiving a net 8 million on Monday and Tuesday.

China's yuan also rose on Wednesday, recovering from the previous day's sharp fall to a three-week low.

Traders said the yuan's decline this week was the result of a short dollar squeeze among local banks, which also led to the daily trading mid-point for dollar/yuan being set by the central bank at a much higher level.

China's central bank fixed the dollar/yuan mid-point at 7.9827 yuan per dollar on Wednesday, 0.23 percent below Tuesday's close of 8.0015 for the pair. The yuan is allowed to move 0.3 percent on either side of the mid-point set each day.

''The correlation between yuan and other regionals remains somewhat weak, but, with fundamentals now more supportive for Asian regionals, a low fix would likely provide a general boost to sentiment,'' Jalinoos wrote.

CURRENCIES VS U.S. DOLLAR Change on the day at 0159 GMT Currency Latest bid Previous day Pct Move Japan yen 116.03 116.59 +0.48 Sing dlr 1.5769 1.5802 +0.21 Taiwan dlr 32.706 32.750 +0.13 Korean won 964.40 965.40 +0.10 Baht 37.41 37.44 +0.09 Peso 51.36 51.44 +0.16 Rupiah 9099.00 9094.00 -0.05 Rupee 46.62 46.62 +0.01 Ringgit 3.6790 3.6800 +0.03 Yuan 7.9862 7.9985 +0.15 Change so far in 2006 Currency Latest bid End prev year Pct Move Japan yen 116.03 117.96 +1.66 Sing dlr 1.5769 1.6625 +5.43 Taiwan dlr 32.706 32.850 +0.44 Korean won 964.40 1011.60 +4.89 Baht 37.41 41.11 +9.91 Peso 51.36 53.09 +3.37 Rupiah 9099.00 9835.00 +8.09 Rupee 46.62 45.04 -3.38 Ringgit 3.6790 3.7790 +2.72 Yuan 7.9862 8.0702 +1.05 REUTERS SKU ND1014