* Malaysian ringgit eyes best day in 5-weeks
* Dollar held off 10-month high
* Asian stocks largely trading higher

By Roushni Nair
       Sept 29 (Reuters) - Asian currencies rose on Friday in
holiday-thinned trading, with the Malaysian ringgit leading the
gainers in what has been a challenging week for regional
currencies after hawkish U.S. Fed rhetoric and surging oil
prices boosted the dollar.
    The ringgit appreciated by 0.4% as of 0350 GMT,
poised for its best session since August. It, however, has been
logging losses for three straight quarters.
     The Indonesian rupiah and Indian rupee
followed suit, strengthening by 0.1% each. The rupiah, though,
is on track for its worst quarterly performance since June last
year, losing more than 3% in value. 
    The U.S. dollar index, which tracks the currency
against six other majors, was largely flat. However, it is on
track for an 11th straight week of gains on expectations that
the U.S. economy would remain more resilient to higher interest
rates and a surge in oil prices. 
    "The speed of the move has led to weaker currencies within
the region, a violent sell-off in local rates, and wider EM
credit spreads. However, the repercussions in different asset
classes have had varied implications," analysts at Barclays said
in a note.
    Markets in Taiwan, China, and South Korea were closed on
account of a public holiday. 
    Asian markets now await key data points in the week ahead,
including the Reserve Bank of India's monetary policy meeting on
Oct. 6, and inflation numbers from Indonesia, the Philippines,
and South Korea.
    Surging fuel prices that touched new highs this week have
stoked concerns about a higher import bill and persistent
inflationary pressures in net oil importers such as Thailand and
India. 
    Barclays noted the spreads versus U.S. ones are still tight
in a world that is adjusting to "higher rates for longer," and
higher oil could pressure EM headline inflation higher before it
hits consumption.
    "While terminals now look high to us, we think it may take
some time to correct and it is not clear that the move is even
over. For the time being, focus should be on spreads between EM
and US rates and not on how far emerging markets are from their
own neutral rates," the note added. 
    Among other Asian currencies, the Thai baht
depreciated by 0.1% and is on track to log its fourth straight
week of losses. The currency, however, has regained some lost
ground after touching 10-month lows through the week. The baht
has lost over 3% in value this quarter. 
    Depreciation in the Thai currency is underpinned by concerns
over a widening fiscal deficit due to higher spending by the
country's new government, which took office last month and is
advancing fresh policies to stimulate the economy.
    Shares in Southeast Asia were largely trading higher, with
those in Singapore advancing 0.5%, while stocks in
Indonesia and India surged over 3%. Shares in the
Philippines lost about 0.4%.  
    
    
    HIGHLIGHTS:    
    ** Indonesian 10-year benchmark yield touches highest since
late March at 6.91% 
    ** Thai c.bank chief says rates pause appropriate 'for now'
after surprise hike
    ** Indonesia's July palm oil exports at 3.52 mln tonnes
-association
    
  Asia stock indexes and currencies                           
 at 0450 GMT                                            
 COUNTRY   FX RIC          FX     FX     INDEX  STOCKS  STOCKS
                      DAILY %  YTD %             DAILY   YTD %
                                                     %  
 Japan                  -0.03  -12.2            -0.26   23.61
                                   1                    
 China                                                 
 India                  +0.10  -0.46              0.41    8.27
 Indonesi               +0.13  +0.45              0.34    1.62
 a                                                      
 Malaysia               +0.41  -6.12             -0.78   -4.45
 Philippi               +0.00  -1.80             -0.43   -3.17
 nes                                                    
 S.Korea                                               
 Singapor               +0.11  -1.80              0.51   -0.86
 e                                                      
 Taiwan                     -  -4.83                 -   15.67
 Thailand               -0.14  -5.45             -0.23  -11.38
 
    

    
 (Reporting by Roushni Nair in Bengaluru; Editing by Muralikumar
Anantharaman)