EMERGING MARKETS-EM stocks, FX gain as yen intervention fears hit dollar; Ukraine bonds gain

By Purvi Agarwal

Jan 26 (Reuters) - Most emerging market stocks and currencies continued to edge higher on Monday as investor fears of intervention in the Japanese yen weighed on the dollar, while investors assessed the progress in Russia-Ukraine talks.

The yen JPY= was up 1.3% against the U.S. dollar, after sharp spikes on Friday prompted speculation over potential intervention. The New York Federal Reserve conducted rate checks on Friday, sources told Reuters, raising the chance of joint U.S.-Japan intervention.

The dollar index =USD slipped 0.2%, while most emerging market currencies gained. MSCI's index tracking global EM currencies .MIEM00000CUS added 0.5%, after logging gains last week.

"The prospect of bilateral Japan-US intervention is understandably a more powerful one than mere passive intervention from Tokyo alone... however, this is not a fundamentally driven move," said Chris Turner, global head of markets at ING.

"The dollar's fundamental story has not deteriorated and we suspect this week's FOMC meeting could prove slightly dollar bullish."

Even though talks between Russia, Ukraine and the U.S. over the weekend ended without a deal, a U.S. official said that more discussions were expected next Sunday in Abu Dhabi.

Ukraine bonds, that had slipped over 1 cent in the previous session, rebounded on Monday, with the one maturing in 2035 XS2895056369=TE up 1.4 cents on the dollar. Russia's rouble RUB= slipped 1.3% against the dollar, over-the-counter market data showed.

However, Russian state news agency RIA cited the Kremlin as saying the territorial issue remains of fundamental importance in the peace talks.

Ukrainian President Volodymyr Zelenskiy said on Sunday a U.S. document on security guarantees for Ukraine is completely ready and Kyiv is waiting for a time and place for it to be signed.

Back in EMEA, South Africa's rand ZAR= advanced 0.6% against the dollar, trading at its highest level in over three years. Stocks .JTOPI climbed 1%.

A 2% jump in spot gold XAU= prices also helped the mining-heavy economy.

Turkey's lira TRYTOM=D3 inched up marginally. Credit ratings agency Fitch assigned a "positive" outlook to Turkey on Friday, citing a faster-than-expected buildup of foreign-exchange reserves that reduced external vulnerabilities in the country.

In emerging Europe, most currencies were subdued against the euro. The Hungarian forint EURHUF= bucked the trend, up 0.1%.

Regional stock indexes broadly extended their rise. Ones in Poland .WIG20 and Hungary .BUX gained 0.3% and 0.4% respectively. Bucharest stocks .BETI slipped 0.1%. MSCI's gauge for EM equities .MSCIEF was up 0.4%, at a record high.

MSCI's indexes had logged gains last week after U.S. President Donald Trump walked backed his tariff threats to Europe over Greenland and soothed investors, while surging commodity prices lifted stocks in resource-rich countries.

Elsewhere, the Democratic Republic of Congo plans to issue a debut Eurobond for $750 million in April, its central bank governor told Reuters, which is part of a broader $1.5 billion issuance program.

China's yuan climbed to a new 32-month high against the dollar as the central bank continued its recent practice of carefully guiding the currency stronger by lifting the official midpoint guidance to manage the pace of appreciation.

HIGHLIGHTS:

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For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB