Sept 17 (Reuters) - A look at the day ahead in Asian

markets.

If deepening gloom around China and a surging Japanese yen are

the local market drivers in Asia, the Fed's upcoming interest

rate decision hangs heavily over world markets as growing hopes

for a 50 basis point cut push the dollar to new lows for the

year.

Wall Street lost ground on Monday even as bond yields edged

lower, with jitters beginning to bubble up as Wednesday's Fed

decision draws closer.

Rates traders are now putting a 60% probability on a half

percentage point cut and expect 120 bps of easing over the three

remaining policy meetings this year. That effectively implies

two of them will deliver 50 bps cuts.

This front-loaded dovishness is weighing heavily on the dollar,

especially against the yen. The Japanese currency on Monday hit

its strongest level since July last year, with the dollar

falling below 140.00 yen before regaining that threshold.

Indeed the MSCI index for emerging market currencies, which

dates back to 2009, hit a lifetime high on Monday.

The decline in U.S. implied rates and yields is putting Hong

Kong interbank rates under downward pressure too. The overnight

Hong Kong interbank offered rate or 'Hibor' on Monday hit a

one-year low around 2.44%, and one-year Hibor touched its lowest

in two years near 4.07%.

Amidst all this, China's outlook continues to darken.

A "downward spiral", reckons SocGen. "From bad to worse" and

"a vicious cycle," says Barclays. "Things could get worse before

they get better," warns Morgan Stanley.

These are some of the reactions from analysts at global

brokerages to the latest wave of weak economic data that shows

not only is the world's second largest economy in deep trouble,

but the global spillover cannot be ignored either.

Economists at Goldman Sachs and Citi lowered their 2024 GDP

growth forecasts for China to 4.7%, a level notably below

Beijing's target of around 5%. Others may well follow suit, and

for most of those that don't, the risk to their outlook is

firmly to the downside.

Uniformly weak industrial, consumer and house price data on

Saturday followed soft bank lending figures on Friday,

bolstering the case for aggressive stimulus to shore up demand

and growth.

The trouble is few analysts expect Beijing to deliver the

scale of fiscal and monetary support required. Some analysts

point to the U.S. and European housing crashes in the Global

Financial Crisis and say it could be a decade before China fully

emerges from its property sector implosion.

The Chinese 10-year bond yield fell below 2.05% on Monday

for the first time ever, nearing a much more symbolically

significant break below 2.00%. The two-year yield around 1.35%

is near the lows plumbed at the height of the pandemic.

Here are key developments that could provide more direction

to Asian markets on Tuesday:

- India wholesale price inflation (August)

- Indonesia trade (August)

- Japan tertiary index (July)