* Philippine stocks decline over 1%
* Equities in S.Korea register worst week in five
* Chinese shares hit over 3-week low

By John Biju
       May 24 (Reuters) - Most Asian currencies and equities
fell on Friday after surprisingly strong U.S. economic data made
investors wary of interest rates staying higher for longer,
hurting sentiment towards riskier Asian assets.
    Data on Thursday showed U.S. business activity accelerated
to the highest level in just over two years in May and
manufacturers reported a surge in prices for a range of inputs,
causing investors to dial back rate cut expectations.
    "For the year, markets are just pricing in 35 basis points
(bps) cut compared to 44 bps cut a week ago," said Christopher
Wong, a FX strategist at OCBC.
    Earlier this week, minutes from the Federal Reserve's latest
meeting indicated willingness from some officials to consider a
rate hike to rein in inflation.
    The Malaysian ringgit declined 0.3% while the Thai
baht slipped 0.2%. The South Korean won
declined 0.5%.
    Equities in the Philippines fell as much as 1.1%
before recovering slightly. Taiwan stocks slipped 0.2%,
a day after a tech-fuelled rally following Nvidia's
quarterly results which helped the benchmark hit a record high.
    Shares in China fell 0.9%, touching levels not seen
since late April, after China's military started a second day of
war games around Taiwan on Friday.
    "The USD rate environment is undisputedly a key driver for
sentiment in Asian markets," said Frances Cheung, a rates
strategist at OCBC.
    "As long as the risk of Fed pivoting back to tightening is
low, Asian markets shall be able to focus on domestic and
idiosyncratic factors. The overall sentiment appears to be one
that investors are convinced that peak Fed hawkishness has
passed," Cheung added.
    Central banks in Asia such as Bank Indonesia and Bank of
Korea kept interest rates unchanged this week, while the
Philippine central bank hinted at cutting rates as early as
August last week.
    "Most Asian central banks shall be able to primarily focus
on domestic factors when they decide on monetary policy, while
currency valuation comes into play if there is a material impact
on imported inflation," Cheung said.
    Stocks in South Korea declined more than 1%, and
logged their worst week in five.
    Malaysia's consumer prices rose slightly less than expected
in April, data showed on Friday. Equities in the country
retreated 0.7%.

    ** Japan's inflation slows further, keeping BOJ cautious on
further rate hikes
    ** Chile central bank cuts rate by 50 basis points to 6.0%
    ** India's new government will be spoilt for choice with $25
bln extra in kitty

 Asia stock                                                            
 indexes and                                                           
 currencies at                                                         
 0746 GMT                                                              
 Japan                             -0.06   -10.16                         
 China                             -0.04    -2.03               -0.88    3.83
 India                             +0.18    +0.09                0.15    5.85
 Indonesia                             -    -3.72                   -   -0.69
 Malaysia                          -0.28    -2.65               -0.65   11.27
 Philippines                       -0.03    -4.77               -0.60    2.63
 S.Korea                           -0.52    -5.95               -1.26    1.22
 Singapore                         +0.03    -2.36               -0.30    2.23
 Taiwan                            -0.06    -4.74               -0.19   20.27
 Thailand                          -0.19    -6.86               -0.37   -3.75

 (Reporting by John Biju in Bengaluru; Editing by Stephen Coates
and Varun H K)