By Navya Mittal
Aug 9 (Reuters) - Asian currencies and equities edged higher on Wednesday after investors priced in the effects of China's consumer prices falling in July, which made it the first G20 economy to enter deflation territory since Japan in 2021.
The Chinese yuan CNY=CFXS strengthened 0.2% as major state-owned banks were seen selling dollars to slow the pace of the yuan's decline, while stocks .SSEC slipped 0.5%.
Weak inflation data from China had fuelled concerns over the outlook for global growth however investors switch focus to the Inflation print from U.S. for further clues on health of the global economy.
The Philippine peso PHP= gained 0.3%, while Indonesia's rupiah IDR= and Malaysia's ringgit MYR= appreciated over a 0.1% each.
Stocks in the region traded higher, with South Korea .KS11 and Malaysia .KLSE leading the gains, as their benchmarks rose over 1% and 0.4% respectively.
Shares in India .NSEI slipped 0.4% while its local unit INR=IN gained slightly. The country's retail inflation is likely to accelerate to 6.4% in July, breaching the upper end of Reserve Bank of India's 2%-6% tolerance bank for the first time, according to a Reuters poll.
In Thailand, the central bank chief said economic growth forecasts may need to be revised down, as the recovery may not be as strong as expected earlier, and interest rates may be raised or held steady at the next policy review.
The U.S. dollar index =USD, which measures the greenback against six major peers, slipped 0.2% to 102.35 as of 0650 GMT.
Concerns about U.S. banks added to the risk-averse sentiment, after Moody's cut credit ratings of several small to mid-sized U.S. banks and said it may downgrade some of the nation's biggest lenders, including Bank of New York Mellon and US Bancorp.
** China, Philippines' dispute over grounded warship heats up
** South Korea unemployment rate climbs to six-month high - Reuters
** Indonesian 10-year benchmark yields are down 1.7 basis points at 6.34%
Asia stock indexes and currencies at 0626 GMT
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Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
Asian stock markets https://tmsnrt.rs/2zpUAr4
(Reporting by Navya Mittal in Bengaluru; Editing by Simon Cameron-Moore and Nivedita Bhattacharjee)
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