By Claire Milhench
LONDON, July 14 (Reuters) - Emerging market stocks pushed to fresh eight-month highs on Thursday and currencies broadly firmed as investors sought out higher-return assets in an increasingly low-yield world.
With a rate cut from the Bank of England expected later in the day, Germany issuing its first negative-yield 10-year bond and more stimulus expected in Japan, investors are piling into emerging assets almost across the board .
In the developing world too, policy easing is underway with Malaysia surprising on Tuesday with its first rate cut in seven years and Singapore's below-forecast second quarter growth pressuring the central bank to act.
"We have a broad risk-on phenomenon and EM assets are just part of the broader risk-on move," said Kasper Bartholdy, chief EM fixed income strategist at Credit Suisse.
"The one big risk is that markets are misreading monetary policy signals ... but for now everything is pointing in the same direction and after looking at Brexit (risks) for so long markets are heaving a sigh of relief."
The benchmark emerging equities index is now in its sixth day of gains, up 0.6 percent to its highest since early November.
Amongst the strongest performers were Turkey up 0.7 percent to two-month highs and Hong Kong up 1.1 percent to two-and-a-half month highs.
Czech stocks rose 0.7 percent, gaining momentum after the current account showed a surplus in May, beating expectations for a deficit.
The average premium investors demand to hold emerging sovereign dollar bonds versus U.S. Treasuries remains near its narrowest in over a year, at around 379 basis points .
On currencies, the rand firmed 0.8 percent against the dollar and the rouble rose 0.6 percent.
Turkey's current account deficit narrowed in May to $2.863 billion, beating forecasts for a $3 billion deficit, whilst industrial production rose 5.6 percent year-on-year.
The Polish zloty rose 0.18 percent against the euro to touch two-week highs, shrugging off worries about a pensions shake-up which saw the government shut down state-guaranteed private schemes and debate lowering the pension age
"Current strong risk appetite for EM assets limits any downside from such announcements, but we think that the market will ultimately take a sceptical view of these pension changes," Commerzbank said, predicting the zloty to stay volatile around 4.45 per euro.
Earlier, the Malaysian ringgit hit 10-week highs as government bonds rallied following Wednesday's rate cut .
The Korean won also touched its strongest in more than 10 weeks after rates were held steady at 1.25 percent.