EMERGING MARKETS-Indonesia stocks, currency steady after virus-scarred week

* Indonesia stocks swing sharply through the session
* 10-year Indonesia bond yields rise to highest since
late-July
* Graphic: Foreign flows into Asian stocks https://tmsnrt.rs/2ReJOMr
* Goldman Sachs bullish on the rupee

Sept 11 (Reuters) - Indonesia's stock and currency markets
touched multi-month lows on Friday as fresh COVID-19
restrictions in Jakarta ate into hopes of an economic recovery,
while overnight selling on Wall Street kept sentiment across
Asia subdued.
Jakarta's main index .JKSE rose 2%, after dropping nearly
3% early in the day, but was still on course for a weekly fall
of around 5% that would be its worst performance since March.
The rupiah IDR= , the region's worst hit currency this
year, slipped 0.4% and was heading for its biggest weekly loss
in a month.
Ahead of the open, Bank Indonesia said again it would
intervene in the spot market to stabilise the rupiah, which
backs one of Asia's most popular bond markets for foreign
investors.
Even with the spate of interventions in recent days, the
currency has dropped 2% in the two weeks since investors were
taken aback by a parliamentary panel's recommendations for
changes to the central bank.
Investors fear the proposed changes could reduce the central
bank's independence at a time when the economy is struggling
with rising COVID-19 cases with a fresh lockdown in Jakarta from
Monday threatening to add further harm to its economy.
"Foreign investors were already concerned about proposed
changes to the central bank law that could erode Bank
Indonesia's independence," said Khoon Goh, ANZ's head of Asia
research.
"Now with the capital heading into lockdown, Indonesia's
economic recovery is in doubt and this will see further investor
caution, likely leading to near-term outflows."
Equity markets in the rest of emerging Asia found their
footing late in the day as Shanghai shares .SSEC rose, with
Manila .PSI up 1% and stocks in Seoul .KS11 erasing losses
to trade flat. However, renewed selling of high-valued U.S. tech
stocks overnight kept investors uneasy.
"With risk sentiment edgy, investors are likely to remain on
the sidelines heading into the weekend," said Edward Ng, an
Asian fixed income portfolio manager at Nikko Asset Management
in Singapore.
Currencies were mostly higher against a weaker dollar.
Malaysia's ringgit MYR= gained 0.2% after its central bank
held rates on Thursday in what some economists saw as a sign it
will hold off on further cuts this year. The Indian rupee INR=IN was flat and stocks in Mumbai
.NSEI edged higher as Indo-China tensions looked to be
de-escalating. .BO
The rupee is set to snap four straight weeks of gains, but
Goldman Sachs, buoyed by large foreign inflows in August, said
it is bullish on the currency, pointing to moves by the Reserve
Bank of India to allow it to appreciate and an attractive carry
trade volatility ratio.

HIGHLIGHTS:
** Indonesian 10-year benchmark yields up 9.5 basis points
to 6.996%
** Top gainers in Jakarta include Akbar Indo Makmur Stimec
Tbk PT AIMS.JK and Pollux Properti Indonesia Tbk PT POLL.JK
** Malaysia's 10-year benchmark yield up 2.5 basis points to
2.712%​​
Asia stock indexes and currencies at 0706 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY % YTD % DAILY % YTD %
Japan JPY= -0.03 +2.31 .N225 0.74 -1.06
China CNY=CFXS -0.04 +1.85 .SSEC 0.75 6.85
India INR=IN -0.04 -2.86 .NSEI 0.11 -5.81
Indonesia IDR= -0.40 -6.72 .JKSE 2.19 -20.65
Malaysia MYR= +0.19 -1.56 .KLSE 0.13 -6.09
Philippines PHP= +0.04 +4.30 .PSI 1.11 -23.64
S.Korea KRW=KFTC -0.17 -2.57 .KS11 0.01 9.06
Singapore SGD= +0.23 -1.62 .STI -0.37 -22.96
Taiwan TWD=TP +0.84 +2.85 .TWII -0.12 5.66
Thailand THB=TH -0.03 -4.47 .SETI -0.03 -18.32