* Taiwan stocks at record high for two straight days * Manila stocks set to rise 1.4% for week * Taiwan dollar rises 0.4% (Updates for afternoon trade) By Rishav Chatterjee Oct 3 (Reuters) – Taiwan and Singapore stocks hit fresh records on Friday, leading a week of gains across emerging Asia as investors piled into risk assets on mounting bets of a Federal Reserve rate cut this month, and a wave of optimism around artificial intelligence. The MSCI EM Asia Index eased slightly on the day. It remained on track for a weekly rise of 3.8%, its biggest weekly increase since September 12. A similar gauge, the MSCI Asia-Pacific equities excluding Japan, touched a record high and was set to advance 3.5% for the week. Friday's trade was subdued, but markets still closed out a robust week, buoyed by upbeat headlines, optimism over AI and expectations of a Fed rate cut towards the end of the month. Traders are now pricing in two quarter-point Fed rate cuts by the end of the year as almost a done deal.. Taiwan’s benchmark climbed 1.5%, rising to a record for a second day. The index is on track for its sixth straight weekly gain, a run last seen in early 2024. Singapore's index scaled a fresh record for a second straight day, with gains led by major lender DBS Group . South Korea's Kospi was closed on Friday on account of a public holiday, but was up 4.8% for the week as of Thursday. Philippine and Indonesian shares rose 1.1% and 0.3%, respectively, while Malaysia slipped modestly, but was still set to end the week in positive territory. Manila equities were on course to rise 1.4% for the week. In the week ahead, investors will be keenly awaiting policy moves by the Philippine and Thai central banks, while looking out for trade numbers from Taiwan. Thai bond markets are pricing in up to 50 bps of easing in the coming months, with expectations the central bank could cut rates by 25 bps to 1.25% in October under its new dovish governor, as growth momentum softens, said DBS analysts. With growth steady and inflation within targets, the Philippine central bank is expected to keep rates at 5% on October 9, though a final cut could come in December following U.S. Fed easing, added DBS. Trading in Asian currencies remained tepid on the day as the dollar gained some momentum and traders expressed caution while assessing the impact of the U.S. government shutdown. "Despite the US government shutdown, a likely delay of US payrolls release today, and Trump’s threats to fire more Federal workers, markets have stayed remarkably resilient," said Chang Wei Liang, FX and credits strategist at DBS. "The corollary of benign financial market conditions is unusually low FX volatility across the board." In emerging Asia, the Indonesian rupiah and Philippine peso added 0.1% each. The Taiwan dollar gained 0.4% while the Thai baht was flat. HIGHLIGHTS ** Indonesian 10-year benchmark flat at 6.334% ** Philippines ends quake rescue efforts, priority now on helping 20,000 displaced Asia stock indexes and currencies at 0650 GMT COUNTRY FX RIC FX DAILY FX YTD % INDEX STOCKS STOCKS % DAILY YTD % % Japan -0.24 +6.50 1.85 16.44 China India -0.09 -3.56 -0.02 5.01 Indonesi +0.06 -2.90 0.26 14.30 a Malaysia -0.24 +6.05 -0.19 -0.47 Philippi +0.12 +0.18 1.14 -6.43 nes S.Korea Singapor -0.12 +5.83 0.35 16.44 e Taiwan +0.36 +8.17 1.45 16.18 Thailand +0.02 +5.77 0.32 -7.70 (Reporting by Rishav Chatterjee in Bengaluru; Editing by Christian Schmollinger and Harikrishnan Nair)
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