* Bank of Thailand keeps rates unchanged

* KOSPI fluctuates, closes at over 3% up

* KOSPI volatility index hits record high

* Jakarta stocks, rupiah slip as MSCI ( MSCI ) delays review to November

(Updates for afternoon trading)

By Sameer Manekar and Rajasik Mukherjee

June 24 (Reuters) - South Korean equities fluctuated on Wednesday as

expectations of U.S. interest rate hikes and concerns over stretched valuations

prompted investors to rethink their leveraged bets following a recent AI-driven

rally.

Indonesia's main equities gauge erased early gains, trading 2% in

red, and the rupiah inched closer to the key 18,000 mark, after index

provider MSCI ( MSCI ) deferred its review of the country's emerging-market status to

November.

Thailand's central bank stood pat on its rates, as expected, doing little to

calm markets. The baht hovered near a 13-month low against the dollar,

while Bangkok stocks held on to a 0.5% gain.

"Believe there are some green shoots visible in Thailand with growth showing

signs of rebounding, driven by increased foreign direct investments and

supportive policies, while tourism has been more resilient than expected," said

Chandresh Jain, EM Asia Rates and FX Strategist, BNP Paribas.

"At the same time, the recent fall in oil prices has alleviated upside risks

to inflation, which will allow the BoT to keep rates on hold for some time."

Elsewhere, the Philippine peso weakened for a seventh consecutive

day, while Singapore stocks touched a record high.

The Indian rupee recouped early losses to trade flat, supported by

likely central bank intervention.

VOLATILITY MARS KOSPI

South Korea's benchmark KOSPI index climbed as much as 4% in early

trade, rebounding from a double-digit drop in the previous session. However, the

recovery momentum eased by noon in Seoul.

After falling as much as 1.5%, the benchmark gauge closed more than 3%

higher, as retail investors rushed to buy the dip.

The KOSPI volatility index climbed to a record 97.72 on

Wednesday, a sharp rise from the mid-70s level seen just two weeks ago.

"Elevated KOSPI volatility reflects uncertainty around the AI-driven rally,

while expectations of higher-for-longer U.S. rates continue to weigh on

sentiment," said Lukman Leong, an analyst at finance brokerage Doo Financial

Futures.

MSCI ( MSCI ) retained South Korea in its "emerging markets" category, citing

long-standing accessibility issues in the onshore foreign exchange market in its

annual market classification review.

Stocks in Taiwan slipped more than 2%.

"EMERGING" CROWN, FOR NOW

Indonesia, Southeast Asia's largest economy, clung to its emerging-market

status after MSCI ( MSCI ) deferred its review, giving regulators more time to deliver

market reforms and avert a downgrade that could trigger billions of dollars in

outflows.

Foreign investors have withdrawn 67.34 trillion rupiah ($3.75 billion) from

Indonesia's equity market so far this year, per exchange data, with roughly a

quarter of the outflows occurring this month alone.

"We view the announcement as largely neutral-to-slightly-positive, as the

outcome was likely already well-anticipated by local investors," said

Jeffrosenberg Chenlim, research head, Maybank Sekuritas.

The Jakarta Composite Index slipped as much as 1.7%, while the

rupiah weakened to 17,955 per U.S. dollar, making another run at the key 18,000

mark.

"For MSCI ( MSCI )-sensitive foreign investors, some may prefer to remain on the

sidelines, waiting for clearer evidence of credible implementation of

Indonesia's shareholder transparency, free-float, and market surveillance

reforms," Chenlim said.

HIGHLIGHTS:

** Thailand under no pressure to raise rates, finance official says

** Some BOJ policymakers call for faster rate hikes, summary shows

** Malaysia to ramp up support for ringgit as foreign outflows, Fed rate

outlook weigh

** MSCI ( MSCI ) reclassifies Bulgaria as frontier market

Asia stock indexes and currencies at 0716 GMT

COUNTRY FX RIC FX DAILY FX YTD % INDEX STOCKS STOCKS

% DAILY YTD %

%

Japan -0.08 -3.12 -0.88 37.42

China India +0.07 -5.07 0.65 -8.23

Indonesia -0.66 -7.15 -2.30 -31.06

Malaysia -0.02 -2.01 0.46 0.45

Philippines -0.54 -4.23 -2.20 -1.02

S.Korea Singapore -0.09 -0.91 0.16 12.22

Taiwan -0.52 -1.11 -2.24 58.97

Thailand -0.52 -5.80 0.60 23.07