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More vulnerable central banks are fortifying their financial systems to ward off the type of capital flight that hit emerging markets during the 2013 "taper tantrum," which was triggered by mere hints of Fed tightening after years of super-easy policy deployed during the Global Financial Crisis. Markets are bracing for the chance the Fed will start to communicate its taper strategy at its Jackson Hole symposium in August, with possible action later in the year.

Some central banks are already responding to Taper talks. In April, Canada's central bank became the first among Group of Seven nations to withdraw its pandemic era stimulus and signalled rates could begin to rise in 2022.

The Norwegian central bank has already announced plans to raise rates in the third or fourth quarter of 2021.

New Zealand and South Korea have similarly dropped loud hints that policy tightening is on the agenda as conditions improve. While decisions would primarily be driven by domestic considerations, the Fed's eventual withdrawal of support looms large as a global risk for every central bank.

Even Japan's central bank, which has hardly budged from its ultra-accommodative settings through decades of global cycles, may see an opportunity to dial back stimulus. "A Fed rate hike may give the BOJ a perfect opportunity to normalise policy, without worrying too much about triggering a yen spike," Nomura's Kiuchi said.

In the past, rising US interest rates attracted funds into dollar assets and away from emerging markets. It happened in 1998 and 2013. Asian markets are in a significantly better shape with strong foreign reserves to support any currency route. India's central bank governor last week said its reserves now exceed $600 billion, which it expects will help against challenges from "global spillovers."

Among nations looking warily at the Fed is Indonesia, which relies on overseas inflows to fund its current account deficit.

"Next year we must prepare for possibilities of the U.S. central bank, the Fed, to shift its monetary policy, reducing its liquidity intervention," Bank Indonesia Governor Perry Warjiyo said last month, adding such U.S. policy shifts would likely impact local bond yields.

The more vulnerable emerging market central banks, such as Brazil, Ghana and Armenia, have already started their tightening cycle on rising inflation pressures.

Russia's central bank raised its key interest rate by 50 basis points to 5.5% on Friday and said more hikes would be needed to rein in high inflation. Turkey aggressively tightened last year, a move its central bank governor hopes will serve as a "shield" against any Fed pivot. But heavy foreign debt keeps Turkey vulnerable to talk of Fed tapering. Rising US yields recently helped push the lira to all-time lows, delaying planned rate cuts.