Rupee up, but most Asia forex turns lower as U.S. yields rise

SINGAPORE (Reuters) - The Indian rupee gained on Thursday, while most emerging Asian currencies turned lower as U.S. Treasury yields rose amid increasing expectations that the Federal Reserve may start dialling down its stimulus as soon as this month.

The rupee rallied as measures announced by the RBI chief Raghuram Rajan late on Wednesday raised hopes of a new approach to the current crisis.

However, regional currency pairs failed to maintain earlier gains as the 10-year U.S. Treasury note yield in Asian trade rose to 2.9301 percent, the highest since July 2011.

"It seems like the Fed remains the quarterback in the current environment," said Emmanuel Ng, a foreign exchange strategist for OCBC Bank in Singapore, expecting further weakness in emerging Asian currencies.

U.S. automakers reported surprisingly solid August sales on Wednesday, indicating the world's top economy appears to be faring better in the third quarter than economists had feared.

The South Korean won ended local trade weaker after hitting a four-month peak as higher U.S. yields and dollar demand from importers prompted stop-loss selling in the currency.

The Malaysian ringgit and the Philippine peso reversed earlier gains as investors added bearish bets again.

The Thai baht came under pressure as the country's consumer confidence in August hit its lowest in nine months.

Rupiah forwards slid with one-month non-deliverable forwards to the dollar weakening to 11,880, its lowest since March 2009.

(Reporting by Jongwoo Cheon; Editing by Jacqueline Wong)