*

MSCI EM Asia index rises to highest in nearly five years

*

Taiwan stocks hover near 28,400 mark

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Investors await Fed rate decision later in the day

By Roshan Thomas

Oct 29 (Reuters) - Stocks in South Korea and Taiwan

resumed a record-setting rally on Wednesday, fuelled by renewed

optimism over artificial intelligence technologies, while

investors' growing expectations for a U.S. Federal Reserve rate

cut whetted risk appetite.

The MSCI index tracking equities in emerging Asia

jumped nearly 1% to its highest in nearly five

years, driven by stocks in South Korea and Taiwan

which make up more than a third of the index.

South Korean equities reignited their rally on Wednesday

after a brief pause in the previous session, rising 1.7% to a

record high of 4,078.99 points, as SK Hynix posted a

record quarterly profit.

The company, a supplier to artificial intelligence chip

leader Nvidia ( NVDA ), said memory chip supply growth will

likely remain constrained even as demand surges, with customers

racing to ramp up investments in artificial intelligence (AI)

data centre infrastructure.

Wall Street also rose to records overnight, buoyed by upbeat

updates from Nvidia ( NVDA ) and Microsoft ( MSFT ), with Nvidia ( NVDA )

saying it secured $500 billion in AI chip orders and would

construct seven supercomputers for the U.S. Department of

Energy.

Taiwan stocks jumped 1.6% to scale a fresh peak just short

of the 28,400-mark. Shares of semiconductor giant TSMC

advanced 2.7% on Nvidia ( NVDA ) outlining how it was making chips in

Arizona at TSMC's facilities.

"It's the tech show, and this is where capital remains

firmly centred," Chris Weston, Head of Research at Pepperstone,

said in a note.

Also on investors' radar later in the day is the Federal

Reserve's much-anticipated rate decision, with markets almost

fully pricing in a 25-basis-point cut.

Trade developments were also in focus, with U.S. President

Donald Trump due to meet Chinese President Xi Jinping in South

Korea on Thursday.

Poon Panichpibool, a market strategist at Krung Thai Bank,

said market players are shifting their focus from trade talks to

upcoming major central bank meetings, particularly the Federal

Reserve meeting later in the day and the Bank of Japan meeting

on Thursday.

The U.S. dollar index edged lower, ahead of the

Federal Reserve meeting. Most currencies in the region were

steady, with the Malaysian ringgit and the Taiwan dollar

both inching up 0.2%.

The Philippine peso was largely unchanged, a day

after it hit a record low of 59.262 per U.S. dollar, as

political uncertainty in recent weeks dented investor

confidence, overshadowing the country's economic fundamentals.

"The US dollar/peso exchange rate would now be a function of

the Bangko Sentral ng Pilipinas (BSP) in terms of interventions

or smoothening the volatility, as one of the major catalysts,

going forward," said Michael L. Ricafort, chief economist,

treasury group at Rizal Commercial Banking Corporation.

Elsewhere, the Singapore dollar, Indonesian rupiah

, and South Korean won edged lower between 0.1%

and 0.2%.

HIGHLIGHTS:

** U.S. and Thailand say they won't target exchange rates for

competitive purposes

** Bessent urges Japan government to give BOJ scope to raise

interest rates

Asia stock indexes and currencies at 0421 GMT

COUNTRY FX RIC FX DAILY FX YTD % INDEX STOCKS STOCKS

% DAILY YTD %

%

Japan +0.06 +3.40 1.92 28.30

China India -0.05 -3.05 0.14 9.84

Indones -0.18 -3.25 -0.26 14.01

ia

Malaysi +0.17 +6.69 -0.31 -2.05

a

Philipp +0.04 -1.60 0.61 -8.26

ines

S.Korea Singapo -0.10 +5.44 -0.34 17.10

re

Taiwan +0.18 +7.23 1.40 23.04

Thailan -0.26 +5.93 0.02 -6.11

d