* Malaysian ringgit, S.Korean won set for worst week since
August
* Inflation in Philippines, Thailand slows
* Indonesia stocks touch record high

By Ayushman Ojha
       Jan 5 (Reuters) - Most Asian currencies were subdued on
Friday, and were on track to end the first week of 2024 lower as
a rally fuelled by an unexpectedly dovish shift from the U.S.
Federal Reserve towards the end of last year stalled. 
    The Malaysian ringgit and the South Korean won
 lost 0.3% each, and were both on track to post their
worst weekly decline since August last year. 
    Indonesia's rupiah and Singapore's dollar were
on course to post their first weekly fall in four.
    Traders have dialled back rate cut bets, with markets now
pricing in a 65% chance of a rate cut in March, compared to 86%
chance a week earlier, according to the CME FedWatch tool.
    This has pushed the greenback to post its strongest week
since July.
    "For the short term, the market is just going to consolidate
a little bit ahead of the nonfarm payrolls to assess the data,"
said Christopher Wong, FX strategist at OCBC.
    Back in Asia, inflation in the Philippines slowed to its
weakest pace in nearly two years in December, in-line with the
regional trend. 
    However, full-year readings remained outside the central
bank's target zone, diminishing chances of near-term rate cuts
and the Bangko Sentral ng Pilipinas (BSP) maintained its stance
that policy settings would stay "sufficiently tight".
    The peso fell 0.2% on Friday and was set for its
worst week since late-August. Stocks stood at their
highest level since August.    
    "Today's reading was within the BSP's monthly inflation
forecast range of 3.6% to 4.4%. Going forward, we expect
inflation to ease in Q1 due to a favorable base from last year,
before increasing again in Q2," analysts at Goldman Sachs said.
    "We continue to expect BSP to keep its policy rate unchanged
at 6.50% until Q3 2024." 
    In Thailand, headline consumer price index (CPI) also
dropped in December from a year earlier, and was the lowest in
34 months.
    The baht inched 0.2% lower on Friday and was set
for its worst weekly fall since early-October. 
    The Taiwanese dollar was largely unchanged ahead of
the country's inflation reading later in the day, but was
heading for its worst week since August.
    Meanwhile, a Reuters poll found that most emerging-market
currencies are set to regain their recent strength later this
year as expectations of interest-rate cuts by the Fed may keep
the dollar in check. 
    Equities in the region were largely mixed, with shares in
Jakarta rising as much as 0.6%, to record high level.
They were also on track for their tenth straight weekly gain. 
    Stocks in Thailand and South Korea were down
0.3% and 0.4%, respectively.
    Stocks Malaysia rose 0.4% to their highest level in
nearly 11 months.
    
       
    HIGHLIGHTS:    
    ** Japan service activity expands in Dec, led by strong new
business - PMI
    ** India likely to report higher GDP growth estimates for
2023/24

  Asia stock indexes and                            
 currencies at 0421 GMT                        
 COUNTRY  FX RIC        FX    FX  INDE  STOCK  STOCK
                     DAILY   YTD     X      S  S YTD
                         %     %        DAILY      %
                                            %  
 Japan               -0.19  -2.6  <.N2  0.70   0.16
                               4  25>          
 China                       8  EC>          
 India               +0.03  +0.0  <.NS   0.37   0.03
                               0  EI>          
 Indones             -0.25  -0.8  <.JK   0.20   1.40
 ia                            3  SE>          
 Malaysi             -0.32  -1.2  <.KL   0.35   1.91
 a                             5  SE>          
 Philipp             -0.19  -0.6  <.PS   0.24   2.61
 ines                          0  I>           
 S.Korea                     3  11>          
 Singapo             -0.11  -0.8  <.ST   0.38  -1.67
 re                            5  I>           
 Taiwan              -0.03  -0.9  <.TW  -0.10  -2.22
                               3  II>          
 Thailan             -0.20  -1.1  <.SE  -0.30   1.02
 d                             7  TI>          
 
    

    
 (Reporting by Ayushman Ojha in Bengaluru; Editing by Stephen
Coates)