(This is the last Morning Bid Asia of the year. The first one

of 2025 will be published on Jan. 6.)

By Jamie McGeever

Dec 20 (Reuters) - A look at the day ahead in Asian

markets.

As the dust settles on a remarkable 24 hours of central bank

activity, investors in Asia round off the last full trading week

of the year hoping for some respite from the global market

selloff sparked by the Fed's 'hawkish cut' on Wednesday.

These nerves were partially soothed on Thursday by the Bank

of England's surprisingly 'dovish hold' and the Bank of Japan's

seeming ambivalence toward raising rates in January.

Some of Wednesday's moves reversed on Thursday - volatility

cooled, a bit of the froth in implied U.S. rates came off, and

FX intervention from several emerging market central banks

helped support EM currencies. Brazil's real bounced off a record

low and South Korea's won from a 15-year low.

But the genie of a 'higher for longer' Fed is out of the

bottle. Wall Street failed to rebound, the dollar hit another

two-year high, lifted by its gains against the Japanese yen, and

Treasury yields leaped again. The 10-year yield nudged 4.60%,

its highest since April and up almost 100 basis points since the

Fed's easing cycle began in September.

Soaring U.S. yields and a booming dollar - and add to that

now a notable correction in emerging equities - have tightened

EM financial conditions significantly. They are now the tightest

since April, according to Goldman Sachs.

The heavy selling pressure on EM assets is unlikely to lift

much as long as the U.S. dollar and yields stay high, and the

threat of large tariffs from the incoming Donald Trump

administration in Washington looms large.

Analysts at JP Morgan estimate that net capital outflows

from EM countries in October totaled $105 billion - $75 billion

out of China alone - marking the worst month since June 2022.

November and December have continued to post outflows too,

albeit more modest.

"We do not rule out more outflows in 1Q24 should the dollar

continue to strengthen and/or sentiment sour. Central to the

outlook will be how residents react. October's data suggest that

residents could also be sending their flows elsewhere," JP

Morgan's Katherine Marney wrote this week.

Friday's calendar in Asia is busy, with Japanese inflation

and an interest rate decision in China grabbing the spotlight.

BOJ Governor Kazuo Ueda said on Thursday that underlying

inflation in Japan remains moderate. But the yen's persistent

weakness could soon shift that dial. Economists expect

November's annual core inflation rate to have risen to 2.6% from

2.3% in October.

Meanwhile, the People's' Bank of China is expected to leave

its benchmark one- and five year lending rates on hold at 3.10%

and 3.60%, respectively.

Beijing has pledged to take a range of fiscal and monetary

steps next year to stimulate economic activity, fight off

deflation, and support markets.

Here are key developments that could provide more direction

to markets on Friday:

- China interest rate decision

- Japan CPI inflation (November)

- Malaysia CPI inflation (November)