EMERGING MARKETS-Taiwan stocks climb after central bank hikes growth forecast on AI bets

By John Biju

Dec 19 (Reuters) - Taiwan shares rose more than 1% on Friday after the central bank raised its growth forecast, citing strong demand linked to artificial intelligence, even as broader caution related to valuations kept the market down for the week.

Taiwan's benchmark stock index .TWII climbed 1.5%, on track to end four straight sessions of losses, as shares in the world's largest chip maker, TSMC 2330.TW, rose 1%, reflecting support from AI-linked demand that has underpinned the island's growth this year.

This has also lifted its stock market, up more than 20% this year and among the region's best performers, alongside South Korea's KOSPI .KS11.

The Taiwan dollar TWD=TP was little changed at 31.545 per U.S. dollar on Friday, a day after the central bank held rates steady and raised its growth forecasts for 2025 and 2026 on strong tech exports.

"The growth revision reinforces confidence in earnings of the tech sector, this subsequently strengthens expectations in chip exports and demand for the TWD," said Glenn Yin, director of research at ACCM, referring to the Taiwan dollar.

In South Korea, the KOSPI rose 0.6%, after chipmaker Micron Technology MU.O delivered a stunning forecast, sending U.S. tech stocks rallying overnight.

The South Korean won KRW=KFTC declined 0.4% and continued to hover close to its lowest level since early April.

For the week, however, stocks in Taiwan and South Korea were heading for their worst week since mid-November as concerns around AI-related costs and investments sparked some sell-off.

Equities in Malaysia .KLSE rose as much as 0.8% to hit their highest since late September. The Malaysian ringgit MYR= was steady at 4.08 per U.S. dollar.

The country has benefited from strong growth prospects, sustained domestic demand, and a sharp recovery in exports, driving up investor interest in the region.

The gains in the Malaysian stocks are "driven by region-wide positive sentiment and domestic supportive flows; stronger ringgit and improving fiscal backdrop, which have boosted investor confidence into the Santa Rally", Yin said.

Singapore's benchmark stock index .STI edged higher, while stocks in Thailand .SETI rose 0.2%. The baht THB=TH was flat for the day but hovered close to June 2021 highs.

The currency has risen more than 9% this year, putting pressure on the tourism and export-reliant economy.

The Indonesian rupiah IDR= edged lower to 16,730 per U.S. dollar for the first time since November 20. Stocks .JKSE declined 0.4%.

HIGHLIGHTS:

** Bank of Japan raises interest rates to 30-year high, signals more hikes

** U.S. launches review of advanced Nvidia AI chip sales to China, sources say

** India to revamp M&A rules to protect retail investors, expedite deals

(Reporting by John Biju in Bengaluru; Editing by Rashmi Aich)

((John.Biju@thomsonreuters.com;))