EMERGING MARKETS-S. Korea, Taiwan stocks lead gains in Asia; FX muted ahead of Fed decision

By Sherin Sunny

Sept 16 (Reuters) - Asian stocks gained on Wednesday, led by chip-heavy benchmarks in South Korea and Taiwan, while currencies were subdued as the U.S. dollar traded at multi-week highs ahead of a widely expected Federal Reserve rate hike, the first in over three years.

The MSCI emerging market Asia equities index .MIMS00000PUS gained as much as 0.9%, after briefly dropping as much as 0.3% to its lowest in three weeks.

Chip-heavy stock indexes of South Korea .KS11 and Taiwan .TWII, which dominate the MSCI equity gauge, gained as much as 1.1% each, snapping a four-day losing streak.

South Korea's KOSPI is benefiting from bargain-hunting in Samsung Electronics and SK Hynix after the recent selloff, said Glenn Yin, director of research at ACCM.

Shares of Samsung Electronics 005930.KS and SK Hynix 000660.KS advanced as much as 2% and 2.7%, respectively.

Resilient AI-memory demand and a weaker won, which supports exporters' earnings, are helping Korean equities outperform the region, added Yin.

Meanwhile, oil prices fell 93 cents to $107.82 a barrel, but remained above $100 a barrel, after an unexpected build in U.S. crude inventories despite continued supply concerns in Saudi Arabia. O/R

Equities in the Philippines .PSI, a net energy importer, fell as much as 1.8% to their lowest level since June 11.

Equities in Thailand .SETI, another oil-importing country, were down 0.4%, while those in Singapore .STI and Indonesia .JKSE were up as much as 0.9% and 1.2%.

Meanwhile, the South Korean won weakened by as much as 0.8% to 1,372.80 per dollar, limiting gains on the MSCI's gauge of EM currencies .MIEM00000CUS which edged higher.

The U.S. dollar index , which measures the greenback's strength against a basket of six currencies, was trading near a two-week high at 99.736. That was ahead of the Federal Reserve decision due later in the day, where traders expect the first of what could be several U.S. interest rate hikes.

Markets are pricing more than a 90% probability of a 25 basis point rate hike, while still expecting a cumulative two hikes by year-end, Lloyd Chan, a senior currency analyst at MUFG, wrote in a note.

Among other currencies, the Singapore dollar weakened to a two-week low of 1.274 a dollar. The Thai baht and the Philippine peso were unchanged, while the rupiah weakened to a more than two-week low of 17,740 against the dollar.

HIGHLIGHTS:

** Markets in Malaysia were closed for a public holiday

** Thailand proposes meeting between PM and US President Trump for trade talks, minister says

** BOJ set to raise interest rates to 31-year high as inflation risks loom