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Philippine shares led emerging Asian markets lower while most currencies also slipped on Wednesday, as Treasury yields perched at two-year highs amid mounting expectations for US interest rate hikes left investors worried about fund outflows.

Currencies in the region were flat to lower, with Indonesia's rupiah, an attractive carry-trade for investors, down a fifth of a percent, while the Thai baht fell 0.3%.

The US dollar firmed as two-year Treasury yields were stuck above 1% and benchmark 10-year yields stood at a two-year high of 1.8860%.

Investors are awaiting the Federal Reserve's Jan. 25-26 meeting for hawkish signals as markets now bet on at least four hikes this year, likely starting in March.

Asian FX, stocks falter on Fed hike fears; won takes breather after BOK tightens

With US interest rates slated to rise, Asia's riskier assets could face outflows, while the region's central banks may also be forced to follow suit and tighten policy to ensure stability.

Stocks in the Philippines fell 1.1%, while in Malaysia, India, South Korea and Taiwan they fell close to 1%.

In China, stocks fell 0.7%, while the yuan edged higher.

The country's central bank on Tuesday flagged more policy easing on the cards to help prop up the slowing economy, sending government bond yields lower across the curve.

"The general hardiness of the Chinese currency is itself becoming a major attraction given its ample liquidity and still-decent carry," Alvin Tan, RBC Capital Market's head of Asia FX strategy, said, referring to a currency that is roughly flat so far this year.

Prices of oil, another big inflation driver, climbed to a seven-year high, adding further pressure on the region's net-importers.

On Thursday, the central banks of Malaysia and Indonesia conclude their policy meetings and although no changes are expected, markets will be keen on what commentary is forthcoming as global monetary policy looks set to tighten.

A Reuters poll showed economists think Bank Indonesia will wait till the second half of the year to hike rates.

The surge in real rates spreads with US real rates suggests central banks in emerging Asian markets have time to maintain their accommodative stances, though "the Fed's hiking course will erode reals spread very quickly", Mizuho said in a note.

Highlights:

** Indonesian 10-year benchmark yields are up 1.9 basis points at 6.416%

** Battery maker LG Energy Solution's public subscription for retail investors ends on Wednesday, with investors placing bids worth more than 32 trillion won solely on Tuesday

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