* Malaysia bourse at near two-week high * Thai baht heads for half a percent weekly drop * Singapore dollar, South Korea"s won up for week * Indian rupee set to lose more than 2% over the week By Sameer Manekar April 9 (Reuters) - Malaysian shares were boosted on Friday by a mega local merger of telecom giants Axiata and Telenor, while Asia"s emerging currencies buckled under pressure from a late pick-up in U.S. bond yields and the dollar. Even though the dollar was poised for its worst week so far this year, U.S. bond yields remained elevated and Asian currencies were set for a mixed end to the week. South Korea"s won, a beneficiary of improving global trade, and the Singapore dollar were on track to post weekly gains of about half a percent each, while Indonesia"s rupiah and the Thai baht were set for losses. However, the greenback"s weakness this week has provided some respite to Asia"s risk-sensitive assets, with returns on the relatively high-yielding bonds in Indonesia and India falling sharply. U.S. Federal Reserve Chairman Jerome Powell"s dovish comments overnight, especially given the recent unexpected rise in weekly jobless claims, supported Treasuries, said Venkateswaran Lavanya, an analyst at Mizuho Bank. In Malaysia, a deal between telecom firm Axiata Group and Norway"s Telenor ASA to combine their local mobile operations sent shares of Axiata and Telenor"s local arm Digi.com soaring, helping the broader market climb 0.5%. The Thai baht eased on Friday and was set to post a weekly drop of 0.5%. Stocks climbed 0.7% for the day. On Friday, the central bank reiterated its accommodative stance, and warned the country might expand less than forecast this year due to a new wave of coronavirus infections. A central bank official said the baht, despite recent weakness, would be volatile. In India, the rupee was set to slide more than 2% this week after the central bank announced a large government bond buying programme earlier this week and kept rates at record lows. The currency fell half a percent on Friday. Next week on investors" radar will be the first-quarter economic performance readings from China and Singapore, India"s inflation and industrial output, as well as central bank policy meetings in Singapore and South Korea. The Monetary Authority of Singapore (MAS) is expected to leave its policy unchanged next week, according to a Reuters poll. A separate poll showed the economy likely contracted slightly in the first quarter. "With the MAS poised to maintain its zero Singapore dollar nominal effective exchange rate appreciation stance next week, I don"t see the Singapore dollar gaining anymore ground in the coming week," said Prakash Sakpal, senior economist, Asia, at ING. Philippine markets were closed for a market holiday. HIGHLIGHTS: ** Indonesian 10-year benchmark yields fall 1.6 basis points to 6.448% ** India"s 10-year benchmark yields fell 1.8 basis points to 6.013% ** Axiata hits 13-month high, while Digi.com surges up to 20% to a 10-month high Asia stock indexes and currencies at 0641 GMT COUNTRY FX RIC FX DAILY FX INDEX STOCKS STOCKS % YTD % DAILY % YTD % Japan -0.17 -5.66 0.20 8.47 China -0.11 -0.46 -0.76 -0.49 India -0.45 -2.49 0.01 6.39 Indonesia -0.21 -3.57 0.07 1.63 Malaysia +0.00 -2.80 0.46 -1.07 Philippines - -1.13 - -8.33 S.Korea -0.36 -3.12 -0.36 8.99 Singapore -0.08 -1.54 -0.18 11.84 Taiwan -0.02 +0.17 -0.43 14.40 Thailand -0.13 -4.89 0.69 8.29 (Reporting by Sameer Manekar in Bengaluru; Editing by Kim Coghill and Subhranshu Sahu)