* RBI leaves rates unchanged as expected, announces bond buying programme * Rupee down as far as 1% * S.Korea"s won at strongest level since Feb-end By Nikhil Nainan BENGALURU, April 7 (Reuters) - The Indian rupee plunged to its lowest level in more than four months on Wednesday after the central bank held rates, while Asia"s other emerging currencies gained as U.S. bond yields continued to retreat and eased pressure on the region"s assets. Stock markets throughout most of Asia gained with India leading the way, rising around 1%. South Korea"s won advanced 0.3% to its strongest level since late February as 10-year Treasury yields extended their declines and put the dollar on the backfoot. The International Monetary Fund also raised its global growth outlook to 6% this year, from 5.5% less than three months ago, pointing largely to the U.S. recovery and unprecedented public spending. Those reflation hopes provided an extra lift to the region, though only just, ahead of minutes from the Federal Reserve"s March meeting, due later on Wednesday. "We expect the broader thematic play of reflation, higher commodity prices, vaccine trade and sharper global economic rebound to play up again," Maybank analysts said. Cautioning that they still do not expect the dollar to be in free fall as U.S. yields remain elevated, "Fed officials need to show some signs of anxiety before UST yield and dollar can ease more meaningfully." The Reserve Bank of India (RBI) left rates unchanged, as widely expected, at a time where daily COVID-19 cases are surging and states reimpose restrictions. While the rupee fell nearly 1%, yields on the benchmark 10-year bonds rose as far as 6.191% before falling to 6.087% after the RBI announced a secondary market government securities acquisition programme, where it would buy 1 trillion rupees worth of bonds from the market in the April-June quarter. Siddhartha Sanyal, the chief economist at Bandhan Bank said a key challenge for the RBI is to "maintain orderly conditions in financial markets", noting large government borrowing and the fresh surge in COVID-19 infections. More broadly, investors have also been recalculating their expectations for when the Fed will tighten policy, a shift from a month and half of rising U.S. bond yields and a surging dollar spurred by financial markets thinking that the central bank will have to abandon its pledge due to a fast-recovering economy. The Fed has pledged not to raise interest rates until 2024, while any indications of change could sap appetite for Asia"s higher-yielding currency and bond markets. South Korea, seen as a beneficiary from a global recovery given its reliance on trade, reported its highest number of new COVID-19 cases in three months, keeping a check on stock market gains. HIGHLIGHTS: ** Indonesian 10-year benchmark yields fell 13.3 basis points to 6.536% ** Spike in long-term Thai govt bonds had limited impact on economy -c.bank minutes Asia stock indexes and currencies at 0641 GMT COUNTRY FX RIC FX FX INDEX STOCKS STOCKS DAILY % YTD % DAILY % YTD % Japan -0.02 -5.94 0.12 8.33 China -0.01 -0.20 -0.31 -0.03 India -0.82 -1.32 0.98 6.05 Indonesia +0.00 -3.17 0.08 0.48 Malaysia +0.10 -2.57 0.18 -2.79 Philippines -0.05 -1.20 0.93 -6.84 S.Korea +0.30 -2.70 0.33 9.19 Singapore +0.02 -1.31 -0.34 12.41 Taiwan +0.26 +0.25 0.45 14.14 Thailand +0.26 -4.31 -0.92 7.99 (Reporting by Nikhil Kurian Nainan and Sameer Manekar in Bengaluru; Editing by Kim Coghill and Shailesh Kuber)