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SINGAPORE, March 13 (Reuters) - Asian currencies firmed on Thursday against the dollar, recovering from the previous day's losses, supported by a stronger Chinese yuan, a rally in regional stock markets and a broad improvement in risk appetite among investors.

A flat close on Wall Street and stability in the price of copper and other commodities that had been spooked by fears of a slowdown and default in China seemed to drive the rally in Asian stocks and currencies, although some traders said it was merely a bout of short-covering.

"Risk sentiment changed overnight but it's really just positioning that's driving the markets," said one trader in Singapore.

Weaker-than-expected Chinese data on retail sales, industrial output and fixed asset investment released on Thursday provided a fresh excuse for the market to be wary of embracing too much risk.

"It certainly suggests the Chinese economy lost momentum into Q1. Demand is soft and commodities have been used as collateral to finance loans etc and, as commodity prices drop and CNY weakens, it creates a vicious circle," said Jonathan Cavenagh, foreign exchange strategist for Westpac Banking Corporation in Singapore.

"Of course a lot of this the market already knows, so I suspect that the market was already primed for some soft numbers," he added.

Earlier in the day, China's central bank set a slightly stronger midpoint fixing for the yuan for the first time in four days, signalling it intends to keep the currency stable and giving the spot yuan a boost.

Indonesia's rupiah was at the fore of Thursday's rally, rising 0.4 percent against the dollar ahead of a policy meeting at which Bank Indonesia was expected to once again keep rates on hold.

This would be the fourth consecutive meeting at which BI will be holding its reference rate steady at 7.50 percent. It raised the rate 175 basis points between June and November last year.

The rupiah has risen more than 7 percent from its lows in December, and yield-seeking foreign money has been flocking to Indonesian equities and bonds, supported by the quick turnaround from last year's crisis and the improvement in the country's current account.

"Real money still likes to own rupiah assets," a rupiah non-deliverable forward trader in Singapore said, explaining the sustained rally in the currency. CURRENCIES VS U.S. DOLLAR

Change on the day at 0808 GMT Currency Latest bid Previous day Pct Move Japan yen 102.52 102.75 +0.22 Sing dlr 1.2658 1.2662 +0.03 Taiwan dlr 30.340 30.375 +0.12 Korean won 1068.90 1070.20 +0.12 Baht 32.30 32.45 +0.46 Peso 44.56 44.65 +0.21 Rupiah 11375.00 11420.00 +0.40 Rupee 61.00 61.22 +0.35 Ringgit 3.2730 3.2870 +0.43 Yuan 6.1378 6.1450 +0.12 Change so far in 2014 Currency Latest bid End prev year Pct Move Japan yen 102.52 105.28 +2.69 Sing dlr 1.2658 1.2632 -0.21 Taiwan dlr 30.340 29.950 -1.29 Korean won 1068.90 1055.40 -1.26 Baht 32.30 32.86 +1.73 Peso 44.56 44.40 -0.36 Rupiah 11375.00 12160.00 +6.90 Rupee 61.00 61.80 +1.31 Ringgit 3.2730 3.2755 +0.08 Yuan 6.1378 6.0539 -1.37 (Reporting by Vidya Ranganathan and Masayuki Kitano; Editing by Kim Coghill)