EMERGING MARKETS-Rupiah leads Asian currencies' rise against wobbly dollar

By Rishav Chatterjee

Sept 29 (Reuters) - The Indonesian rupiah rebounded on Monday from a near five-month low as the central bank kept up its guard to ensure the currency's stability, while most Asian peers edged higher against a wobbly U.S. dollar.

Equities in emerging Asia rose slightly as investors assessed the fallout of a possible shutdown of the U.S. government that would threaten release this week of jobs data, key for markets to bet on the Federal Reserve's easing path.

Those concerns kept pressure on the U.S. dollar index, which slipped 0.2% against a basket of major currencies.

"The shutdown can hinder the release of the key government-produced data, such as the NFP, and result in more focus on the other indicators," Maybank analysts said in a note.

An MSCI index of EM Asia equities .MIMS00000PUS added 1%, largely driven by South Korea's KOSPI .KS11, which rebounded more than 1% from Friday's two-week low on hopes of dividend-friendly tax reforms.

Hong Kong-listed shares of Tencent 0700.HK and Alibaba 9988.HK jumped up to 3% each.

In Southeast Asia, Indonesia's currency IDR= rose up to 0.5%, to stand at 16,650 against the dollar, after ending last week near its weakest since April 30.

That depreciation of about 0.9% prompted the central bank to intervene in financial markets to stabilise the currency.

Bank Indonesia's surprise rate cut, its "burden sharing" deal with the government, and the abrupt exit of a respected finance minister are fuelling investor fears about political interference.

That has raised doubts about the central bank’s independence and the credibility of economic policy in Southeast Asia's largest economy.

"The rupiah will continue to be volatile in the short term, given increased political noise, lower policy visibility, and headline risk," said Massimiliano Bondurri, founder and CEO of SGMC Capital.

"This being said, for long-term investors current levels are attractive to enter the currency and take advantage of recent depreciation."

Indonesia is due to issue this week inflation data for September, though the central bank's shifting focus on growth implies it could have little bearing on the monetary policy stance.

Analysts broadly expect 50 basis points of rate cuts over the next two quarters.

Elsewhere, the Malaysian ringgit MYR=, Singapore dollar SGD=, and the Philippine peso PHP= firmed between 0.2% and 0.1%.

The Thai baht THB=TH meandered around 32.25 a dollar, while South Korea's won KRW=KFTC gained 0.7% and the Chinese yuan CNY=CFXS rose 0.2%.

Among equity markets, the benchmark index in Manila .PSI fell 0.2%, while those in Jakarta .JKSE and Singapore .STI added between 0.2% and 0.6%.

Stocks in Thailand .SETI surged as much as 0.9%, as the new prime minister outlined measures to fire up a sluggish economy.

HIGHLIGHTS:
Yield on Indonesia's 10-year bonds ID10YT=RR ticks higher to 6.435%
US tariffs threaten $3.1 billion of Singapore's pharma exports, trade talks ongoing
Thailand to step up China cooperation, lines up economic stimulus