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* South Korean won falls most among Asian currencies * Singapore dollar and Chinese yuan flat * Stocks in Malaysia and Thailand gain By Rishav Chatterjee June 14 (Reuters) - Asian currencies weakened against the dollar on Wednesday as cautious investors awaited the U.S. Federal Reserve policy decision later in the day after data showed a slowdown in U.S. inflation, strengthening bets of a pause. The much-anticipated U.S. inflation report showed prices barely rose in May, bolstering the probability of a pause from the Fed with the market seeing a more than 97% chance of a pause, followed by a 65% chance of an increase in July, according to the CME FedWatch tool. The Federal Open Market Committee (FOMC) was set for a "hawkish pause" in June, Vishnu Varathan, economics and strategy head at Mizuho Bank said in a note. "This is not a pause that shifts to neutral gear, with the Fed assessing symmetric policy options; (the Fed is) equally likely to drive on with hikes or hit the reverse gear to embark on cuts," Varathan said, adding the Fed was nearing the peak of its tightening cycle. The U.S. dollar index, which measures it against a basket of currencies, was flat-to-low during Asia trading hours, after falling to a more than three-week low following the unexpectedly soft inflation data. Treasury yields rebounded from a brief decline overnight after the inflation data, with the 10-year benchmark yields trading at 3.8036%, down 3.54 basis points. Back in Asia, the South Korean won lost 0.3%, while the Philippine peso and Thai baht both weakened 0.2%. The Indonesian rupiah and Malaysian ringgit also lost steam to both fall 0.1%, while the Singapore dollar was flat. South Korea's import prices dropped in May at the fastest pace in three years, central bank data showed, suggesting continued downward pressure on inflation, making the won the top loser among other emerging markets. China's yuan was trading flat, recovering from a six-month low on Tuesday after a rate cut by the central bank and reports of further stimulus measures to support economic growth. "Worries about China's recovery momentum and the policy divergence between the PBOC (dovish) and Fed (hawkish) are likely to bias the CNY weaker in the coming quarter," analysts at United Overseas Bank said in a note. "We are of the view that a rebound in the CNY will likely start in 4Q23 when China's economic recovery regains momentum." Equity markets in the region remained mixed, with stocks in Indonesia and South Korea falling 0.4% and 0.3%, respectively. Shares in Kuala Lumpur and Singapore gained 0.3% and 0.7%, respectively. HIGHLIGHTS: ** China central bank seen cutting medium-term policy rate - poll ** Thailand economy to expand with some upside risks - c.bank minutes ** South Korea's jobless rate fell in May to a record low Asia stock indexes and currencies at 0357 GMT COUNTRY FX FX FX INDEX STOCKS STOCKS RIC DAILY % YTD % DAILY YTD % % Japan +0.14 -6.36 0.87 27.63 China +0.05 -3.67 0.24 4.93 India +0.09 +0.52 0.15 3.53 Indonesia -0.20 +4.57 -0.44 -2.35 Malaysia -0.06 -4.70 0.32 -7.38 Philippines -0.26 -0.54 -0.72 -1.62 S.Korea -0.37 -0.91 -0.47 17.40 Singapore +0.01 -0.13 0.78 -1.14 Taiwan -0.02 -0.05 0.06 21.85 Thailand -0.33 -0.14 -0.12 -6.48 (Reporting by Rishav Chatterjee in Bengaluru; editing by Robert Birsel)