(Jan 19): Southeast Asian stocks were subdued on Thursday as comments from Federal Reserve Chair Janet Yellen hinted at steady interest rate hikes in 2017 and US President-elect Donald Trump's inauguration on Friday kept investors anxious.

Yellen said on Wednesday that it "makes sense" for the US central bank to gradually lift interest rates and that "waiting too long to begin moving toward the neutral rate could risk a nasty surprise down the road."

Yellen's bullish comments overnight strengthened the dollar, and "the gains at their end spilled over into Asian markets", said Victor Felix, an analyst with AB Capital Securities in Manila, adding that investors are now watching out for Trump's inauguration.

Philippine shares closed 1.25% higher, posting their biggest percentage gain in more than a week.

Real estate and industrial stocks led the index with Ayala Land Inc and Universal Robina Corp rising 3% and 3.8%, respectively.

The market expects a "good" GDP report for 2016 and better-than-expected corporate earnings, said Mikey Macanaig, analyst with Sun Securities Inc, adding a weaker peso and the dollar index reaching the 100-point mark are driving the market higher.

Thailand shares ended 0.4% lower, hit by losses in consumer staples and financials.

Top convenience store chain CP All PCL shed 1.7%, while Kasikornbank PCL fell nearly 2%.

Stock markets in Vietnam, Singapore, Malaysia and Indonesia remained muted, while MSCI's broadest index of Asia-Pacific shares outside Japan was flat at 0940 GMT.

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