* EM stocks snap two-day losing streak

* Pace of declines in China's industrial profits eases

* China Evergrande chairman under police watch- report

* Thai c.bank unexpectedly raises key interest rate

* Czech interest rate decision due

Sept 27 (Reuters) - Emerging market stocks on Wednesday got a lift from signs of economic recovery in China and hopes of further policy support, though regional currencies stayed under pressure on jitters around higher-for-longer U.S. interest rates.

China's blue-chip CSI 300 and Hong Kong's benchmark index gained 0.2% and 0.8%, respectively, as data showed a slight easing in the pace of declines in industrial profits, adding to evidence that policy support steps undertaken by authorities were beginning to take effect.

Aiding sentiment further, China's central bank said it would step up policy adjustments to boost economic recovery.

However, concerns about China's property sector continued to balloon, with the chairman of Evergrande Group under police surveillance, according to a Bloomberg News report. Shares of the embattled developer were down 19% on Wednesday, taking this week's losses so far to nearly 42%.

MSCI's index of emerging market equities (EM) was up 0.1% by 0856 GMT.

The index had fallen for the past two straight sessions as U.S. Treasury yields soared to multi-year highs after the Federal Reserve's hawkish signals fuelled expectations about further tightening by the central bank.

The EM currencies index was in the red for the third day in a row, down 0.1% with the dollar muted after having hit a ten-month peak of 106.32 earlier in the session.

"The FX market has become too convinced of a 'soft landing' for the U.S. economy," said Ulrich Leuchtmann, head of FX and commodity research at Commerzbank, adding that the USD rally could see a strong correction if it doesn't materialize.

Thailand's baht pared early losses and was last down 0.4% against the dollar after the country's central bank unexpectedly raised its key interest rate for an eighth straight meeting.

Among central and eastern European currencies, the Hungarian forint firmed 0.6% versus the euro, a day after the central bank cut its one-day deposit rate to 13%.

The Czech crown was flat ahead of a local monetary policy decision, where the central bank is expected to keep interest rates on hold for a tenth straight meeting, according to a Reuters poll.

Crude prices continued their climb on Wednesday, pressuring currencies of importers such as India and Turkey.

Turkey's lira hit a fresh record low of 28 to the dollar. For GRAPHIC on emerging market FX performance in 2023, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2023, see https://tmsnrt.rs/2OusNdX

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For RUSSIAN market report, see (Reporting by Amruta Khandekar; Editing by Devika Syamnath)