*

Bank Indonesia cuts interest rate by 25 bps

*

Indonesia's stocks up 0.7%, on track for record close

*

Rupiah largely stable against U.S. dollar

*

Taiwan, S.Korea stocks slip off record highs

*

MSCI EM Asia climbs for ninth consecutive session

(Updates for afternoon trade)

By Sameer Manekar

Sept 17 (Reuters) - Indonesia's stocks advanced while

the rupiah slipped a shade after its central bank delivered a

surprise quarter-point rate cut on Wednesday, while a record

rally in most emerging Asia equities stalled ahead of a widely

expected U.S. monetary policy easing.

Indonesia's equity benchmark gauge jumped 0.7% to a

three-week high and was headed for its best close. The rupiah

slipped briefly against the dollar to 16,445 but then

pared losses, while yields on 10-year government bonds

were unchanged at 6.339%.

Bank Indonesia slashed its key

interest rate

by 25 basis points, against expectations of a hold, to

prioritise economic growth amid turbulence from protests, the

abrupt departure of a reputed finance minister, and concerns

over the central bank's autonomy.

However, a largely sedate reaction in the rupiah and

bonds signalled investor confidence in the administration

maintaining fiscal discipline.

"Rupiah assets remain sensitive to domestic political

developments, especially over signs of any compromise to the

central bank's independence," said Radhika Rao, a senior

economist at DBS.

"Beyond knee-jerk weakness, the currency and bond markets

have given the benefit of doubt to the administration, with

expectations that the fiscal deficit will be kept within target

this year."

Equity gauges in Taiwan and South Korea

slipped from their record levels scaled in the previous session,

with the latter falling more than 1% to snap an 11-session

winning streak.

The MSCI gauge of EM Asia stocks was up

0.5%, as of 0800 GMT, climbing for the ninth consecutive session

to a four-year peak, though downbeat performances in Taiwan and

South Korea limited the upside. A similar index tracking ASEAN

equities had barely moved by noon in Singapore.

Stocks globally have been buoyant over the past few sessions

as investors rush into risk assets on hopes that an imminent Fed

rate cut on Wednesday and signals of further easing will boost

the economy and ease worries over a weakening labour market.

Lower U.S. interest rates are a drag on the dollar, which

enhances the appeal for emerging market assets for their higher

yield and potential currency appreciation.

In Southeast Asia, Thailand's equity index drifted

around its previous close, while the baht slipped to

31.7600 per dollar.

Singapore's FTSE Straits Times index fell for a

fourth consecutive day but remained about 50 pips shy of its

lifetime high scaled last Friday. The Singaporean dollar

also slipped off an eight-week high touched in the previous

session.

Stocks in Malaysia gained modestly after a two-day

break, while the ringgit hovered around a five-week high

of 4.1890 a dollar.

HIGHLIGHTS:

** Spread on Indonesia's 1- and 10-year government bond

yields at 117.1 bps, recovering from the Jan 2023 low of 126.4

bps

** Thai baht up 8% YTD; c.bank eyeing gold trading

tax to curb strength

** Singapore's non-oil domestic exports much weaker than

forecast in August

** Hang Seng index at 4-year high; leader pledges to

boost economy and livelihoods

Asia stock indexes and currencies at 0800 GMT

COUNTRY FX RIC FX DAILY FX YTD INDEX STOCKS STOCKS

% % DAILY YTD %

%

Japan -0.13 +7.17 -0.25 12.27

China India +0.29 -2.49 0.38 7.15

Indones +0.06 -2.04 0.69 13.17

ia

Malaysi +0.19 +6.58 0.46 -2.13

a

Philipp -0.11 +2.12 1.01 -4.87

ines

S.Korea Singapo -0.13 +6.90 -0.37 14.10

re

Taiwan +0.12 +9.03 -0.75 10.43

Thailan -0.24 +8.01 0.06 -6.52

d

($1 = 16,435.0000 rupiah)