* Graphic: World FX rates tmsnrt.rs/2egbfVh * Graphic: Foreign flows into Asian stocks tmsnrt.rs/3lKhL5I * Indonesian shares hit over 10-month high * S. Korean shares set to snap two-day losing streak * Malaysian stocks poised for second day of gains By Shriya Ramakrishnan Dec 16 (Reuters) - Malaysian shares extended gains on Wednesday after the country"s parliament approved a budget aimed at spurring economic activity, while Asian currencies traded in a narrow range as investors awaited cues from the U.S. Federal Reserve. Regional share markets rose in line with their broader Asian peers, as continued progress on the roll-out of COVID-19 vaccines and growing prospects of more U.S. fiscal stimulus lifted risk sentiment. Malaysian stocks jumped as much as 1.3%, with gains on the benchmark index dominated by shares of financial firms and glove makers. Lawmakers in the country approved the government"s 2021 budget, which includes a record 322.5 billion ringgit ($79.65 billion) in spending next year, as it seeks to lift activity in an economy badly hit by the coronavirus pandemic. "We expect 2021 to be a better year for the market..additional liquidity from the government stimulus announced in Budget 2021 could help boost retail interest in the market and cultivate stronger animal spirits," analysts at trading firm CGS CIMB wrote in a note. The passage of the budget could also signal a firmer footing for Prime Minister Muhyiddin Yassin, whose eight months in office have been beset by infighting in his ruling coalition and a leadership challenge from opposition leader Anwar Ibrahim. Indonesian shares climbed 1.5% to hit their highest level since Jan. 30, while South Korea"s KOSPI was set to snap a two-day losing streak. Sentiment in South Korea also improved as the country"s prime minister pledged to secure more hospital beds to handle a record surge in COVID-19 cases and blunt a corresponding spike in deaths. In currency markets, investors were focused on the outcome of the U.S. central bank"s final policy meeting of the year, where it expected to keep its overnight interest rate pinned near zero and to signal it will stay there for years to come. Analysts said the decision could further boost investors" confidence for risk-taking. The dollar index, which measures the greenback against a basket of currencies, hovered near 2-1/2 year lows. The Philippine peso, S. Korean won and Malaysian ringgit edged higher. The Indonesian rupiah and the Philippine peso were largely steady ahead of their respective central bank meetings on Thursday. Analysts polled by Reuters expect Bank Indonesia to keep its key interest rate unchanged at a record low of 3.75%, having cut rates five times this year. HIGHLIGHTS: ** Malaysia"s 10-year benchmark yield is down 2.19 basis points at 2.735% ** Top gainers on the Jakarta stock index include Zebra Nusantara Tbk PT, up 33.33% at 100 rupiah, Apexindo Pratama Duta Tbk PT up ​25% at 530 rupiah ** Top gainers on FTSE Bursa Malaysia Kl Index include Hartalega Holdings Bhd up 5.34% at 12.62 ringgit, Top Glove Corporation Bhd up 5.3% at 6.75 ringgit, Telekom Malaysia Bhd up ​3.21% at 5.47 ringgit Asia stock indexes and currencies at 0434 GMT COUNTRY FX RIC FX FX INDEX STOCK STOCKS DAILY YTD % S YTD % % DAILY % Japan +0.15 +4.94 0.12 12.95 China -0.04 +6.44 0.18 10.59 India +0.19 -2.88 0.67 12.25 Indonesi -0.07 -1.56 1.47 -3.19 a Malaysia +0.05 +0.96 0.72 6.12 Philippi +0.05 +5.40 0.22 -7.32 nes S.Korea +0.11 +5.89 0.48 26.04 Singapor +0.04 +0.96 0.40 -11.01 e Taiwan +1.12 +6.97 1.59 19.12 Thailand -0.07 -0.50 0.29 -6.23 ($1 = 4.0490 ringgit) (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Sam