EMERGING MARKETS-Taiwan, South Korea lead equities lower ahead of central bank meets

By Roshan Thomas

Dec 16 (Reuters) - Tech-heavy stock markets in South Korea and Taiwan slipped about 2% on Tuesday, pushing emerging Asia equities to their lowest in three weeks, as investors turned cautious ahead of central bank decisions, U.S. economic data and year-end holidays.

An MSCI gauge of emerging Asian equities .MIMS00000PUS fell 1.6% to its lowest since November 25. Benchmarks in South Korea .KS11 and Taiwan .TWII shed about 1.8% each on concerns about the future of AI-related companies.

The two tech-heavy East Asian countries make up more than a third of the broader MSCI index.

Korean chipmakers Samsung Electronics 005930.KS and SK Hynix 000660.KS fell 1.6% and 3.1%, respectively, while battery maker LG Energy Solution 373220.KS slid 5.5%.

Taiwan stocks .TWII fell to their lowest level since December 1, weighed down by losses in contract chipmaker TSMC 2330.TW, which shed 1.7%.

In Southeast Asia, Singapore’s Straits Times Index .STI briefly crossed the 4,600 mark for the first time in early trading, but reversed course to trade marginally lower by mid-day.

Indonesia's benchmark gauge .JKSE edged lower but remained around 140 points shy of its lifetime high of 8,776.970 points.

Stocks in Malaysia .KLSE and the Philippines .PSI rose up to 0.5%, with the former touching an over two-month high.

Market attention is fixed on the central banks' final monetary policy meetings of the year in Taiwan, Indonesia, and Thailand. Economists polled by Reuters predict no change in interest rates for Indonesia and Taiwan, but they anticipate a quarter-point rate cut from the Bank of Thailand to boost growth. POLL/

Bank Indonesia is expected to keep interest rates unchanged, "a move that should limit any significant market impact", analysts at Maybank said in a note.

"Seasonally high USD demand around year-end, normalisation of the open-market operation curve, and recent news on U.S.-Indonesia trade negotiation headwinds warrant a more cautious monetary policy response," Aldian Taloputra, senior economist, Indonesia, at Standard Chartered, wrote.

"Despite a likely rate pause, we think Bank Indonesia is still looking for room to cut rates to support growth, especially given the recent Fed rate cut."

Currencies were largely on the back foot against the greenback: Taiwan's dollar TWD=TP, South Korea's won KRW=KFTC, Indonesian rupiah IDR=, and the Thai baht THB=TH weakened up to 0.5%. Malaysia's ringgit MYR= inched up to its strongest point since early March 2021.

Meanwhile, the Bank of Japan is set to raise interest rates on Friday to a three-decade high, signalling it will continue tightening borrowing costs.

The move would bring the central bank’s total rate hikes this year to two, despite headwinds from U.S. tariffs and the inauguration of a dovish prime minister. The yen JPY= was last trading around 154.78 per U.S. dollar. USD/

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(Reporting by Roshan Thomas in Bengaluru; Editing by Michael Perry)

((Roshan.Thomas@thomsonreuters.com))