* MSCI EM currency index on course for worst day in 4 weeks * Turkey’s lira down 0.3%, S. African rand extends losses * EM stock index up for 9th day, Taiwan shares surge to new highs Feb 17 (Reuters) - Emerging market currencies weakened on Wednesday, extending losses to a second day, as rising U.S. bond yields put the dollar on-track for its best session in two weeks. Benchmark ten-year Treasury yields hit a one-year high to trade near pre-pandemic levels, as vaccine rollouts and stimulus measures spurred bets of a likely spike in inflation as the global economy recovers from a coronavirus-induced slump. MSCI’s index of emerging market currencies slipped 0.3% and was on course to post its worst session in four weeks, as the dollar rode the yield trade higher. “The extended bond sell-off somewhat (and temporarily) derailed FX momentum and weighed on non-USD FX,” said a team of analysts at Maybank led by Saktiandi Supaat, head of FX research. “That said, we believe pro-cyclical and commodity-linked FX should still benefit if global growth rebound continues to show up alongside smooth roll-out of vaccination to other nations.” Turkey’s lira slid 0.3% ahead of a central bank meeting due Thursday in which it is expected rates will be kept on hold at 17%. The currency has risen about 14% since late November when it began a largely steady move higher as the central bank began hiking rates. Communication from the central bank indicating a tight monetary policy for some time to come has kept the currency buoyed. In January, the bank stood pat on rate with inflation on an uptrend. South Africa’s rand extended losses after Citi took profit in its three-month bet on the rand versus the dollar. Losses in Russia’s rouble were limited by oil prices staying near 13-month highs. Among stocks, Turkey and Russia were muted following a dip in most Asian peers. An index of developing market stocks, however, rose 0.3%, marking its ninth straight session in the black, with Taiwan shares rocketing to new highs in a catch-up rally as they returned from a holiday period. For GRAPHIC on emerging market FX performance 2020, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance 2020, see tmsnrt.rs/2OusNdX For TOP NEWS across emerging markets For CENTRAL EUROPE market report, see For TURKISH market report, see For RUSSIAN market report, see (Reporting by Susan Mathew in Bengaluru; Editing by Krishna Chandra Eluri)