* Bank of Korea holds benchmark rate at 3.50% * U.S. Dec inflation data due later in the day * Manila stocks lead gains in the region By Echha Jain Jan 11 (Reuters) - Most emerging Asian currencies and equities edged higher on Thursday, with the South Korean won leading gains among the pack, as traders keenly await U.S. inflation data for clues on the Federal Reserve's timeline on monetary policy easing. The South Korean won appreciated as much as 0.4% against the U.S. dollar, while stocks in Seoul edged higher, after the central bank kept its benchmark rate unchanged at 3.5% and hinted it might pivot towards easing along with its global peers. Min Joo Kang, a senior economist at ING, wrote they expect the first Bank of Korea rate cut in the second quarter of 2024, with inflation stabilizing in the 2% range. "The Bank of Korea is not in any hurry to cut rates, but rising default risks and the potential damage to financial markets may eventually force their hand," the ING note said. Broader market sentiment was buoyed ahead of key U.S. inflation data for December due for release later in the day, where a soft print could lift rate cut bets for March. Currently, CME's FedWatch Tool is showing a 66% chance of a cut. "An upside surprise to the CPI could lift the U.S. dollar as well as U.S. Treasury yields but we reckon bullish reversals will not last very long," analysts at Maybank wrote. While market continues to expect 150 basis points of cuts by the Fed by December-end, Maybank analysts remain "cautious of some fine-tuning of these expectations as the path lower for inflation may still be bumpy in the coming months". A dovish tilt by the U.S. Federal Reserve provides a respite to Asian central banks, with a downward trend in local inflation allowing them to begin considering their respective rate cut trajectories. Bank Indonesia (BI) will meet on Jan. 16 to decide on its benchmark interest rates. Analysts at DBS expect a "calibrated exit plan" with the central bank "exhibiting a lower urgency to lower rates to preserve financial stability". The Indonesian rupiah and the Thai baht largely traded flat, while the Philippine peso ticked higher. Meanwhile, the baht depreciated as much as 0.7% on Wednesday as Prime Minister Srettha Thavisin raised concerns with Bank of Thailand governor over high interest rates and economic conditions in a meeting. Galvin Chia, an emerging markets strategist at Natwest, said, "the tension has the potential to hurt sentiment around the Thai baht, and may prompt markets to price in lower interest rates". Stock markets in Manila jumped as much as 1.2% and led gains in the region, while shares in Jakarta added 0.4%. Equities in Bangkok retreated 0.3%. The MSCI Emerging Markets stocks index was up 0.6%, on course to snap a four-day losing streak. Markets in Taiwan were trading higher ahead of a pivotal presidential and parliamentary election on Saturday that is being closely watched internationally at a time of heightened tensions with China. HIGHLIGHTS: ** Japan's Nikkei breaks 35,000 for first time since Feb 1990 ** Malaysia palm output to improve amid better labour conditions - MPOB ** Indonesia raises minimum equity of insurance firms to at least $16 mln by 2026 Asia stock indexes and currencies at 0419 GMT COUNTRY FX RIC FX FX INDEX STOCKS STOCK DAILY YTD % DAILY S YTD % % % Japan +0.29 -2.92 <.N22 1.95 4.92 5> ChinaC> India +0.06 +0.27 <.NSE 0.35 -0.17 I> Indones +0.02 -1.07 <.JKS 0.38 -0.25 ia E> Malaysi -0.02 -1.08 <.KLS -0.15 2.06 a E> Philipp +0.23 -1.32 <.PSI 1.04 2.54 ines > S.Korea 1> Singapo +0.15 -0.77 <.STI 0.53 -1.35 re > Taiwan +0.12 -1.18 <.TWI 0.55 -2.06 I> Thailan +0.04 -2.51 <.SET -0.32 -0.48 d I> (Reporting by Echha Jain in Bengaluru; Editing by Christian Schmollinger)