EMERGING MARKETS-Most Asian FX, equities fall as China's parliament meeting disappoints

(.) * Equities in Malaysia fall 1% * Taiwan shares hit new record high * China annual parliament meeting in focus By John Biju March 5 (Reuters) - Most Asian equities and currencies retreated on Tuesday, as Chinese parliament's annual session kept investors waiting for substantial policy measures to stimulate growth in the world's second-largest economy and the region's largest trading partner. MSCI's broadest index of Asia-Pacific shares outside Japan retreated 1%. The Hang Seng China Enterprises index, which includes Chinese stocks listed in Hong Kong, fell as much as 3%. In contrast, equities in Taiwan rose as much as 0.8% to a new record high powered by strong gains in chip companies such as Taiwan Semiconductor Manufacturing Co and Quanta Computer. China's parliament, the National People's Congress (NPC), started its annual session on Tuesday, where it retained last year's target for economic growth of "around 5%" for this year and announced plans to run a budget deficit of 3% of economic output, down from a revised 3.8% last year. DBS analysts wrote that the growth target raises expectations that officials will continue to unlock stimulus to bolster confidence. "We foresee both monetary and fiscal policies will have to surprise to the upside in 2024 to achieve the goal of stabilization and high quality of growth," they added. A string of recent data has pointed to a challenging economic outlook for China. Investors now await inflation data for February, due later in the week. In Southeast Asia, data from the Philippines showed the country's annual inflation sped up for the first time in five months in February. The Bangko Sentral ng Pilipinas (BSP) said that risks to the inflation outlook have receded but remain tilted toward the upside. Frances Cheung, a rates strategist at OCBC, said February inflation was not inconsistent with BSP's full-year forecast, which is unlikely to move the needle much for the monetary policy outlook. "We continue to expect Philippines' easing cycle to start in late 2024," Cheung said. In contrast, Thai inflation fell for a fifth consecutive month in February. The Thai baht retreated 0.4% while stocks fell 0.2%. Among currencies, the Taiwan dollar, the South Korean won and the Indonesian rupiah inched 0.2% lower. Elsewhere, the Bank Negara Malaysia (BNM) will announce its interest rate decision on Thursday. "The recent depreciation in the currency (ringgit) is unlikely to prompt a hike or tightening in conditions by the BNM. BNM is likely to keep the policy rate steady at 3.0% when it meets later this week," Sim Moh Siong, a senior currency strategist at Bank of Singapore wrote. The ringgit inched 0.2% lower and has lost 2.9% so far this year. Stocks in Malaysia retreated 1%. A testimony by the U.S. Federal Reserve Chair Jerome Powell and U.S. jobs data for February later this week are also on investors' radar. HIGHLIGHTS: ** Inflation in Japan's capital re-accelerates in February ** China drops 'peaceful reunification' reference to Taiwan; raises defence spending by 7.2% ** Indonesia's GDP may grow more than 5.1% in 2024, cenbank gov says Asia stock indexes and currencies at 0654 GMT Japan +0.03 -6.25 <.N2 25> -0.03 19.82 China EC> India -0.03 +0.35 <.NS -0.25 2.85 EI> Indones -0.16 -2.32 <.JK -0.32 -0.26 ia SE> Malaysi -0.19 -2.94 <.KL -0.98 4.77 a SE> Philipp -0.01 -1.07 <.PS -0.36 7.39 ines I> S.Korea 11> Singapo -0.05 -1.84 <.ST -0.46 -4.09 re I> Taiwan -0.18 -2.70 <.TW 0.42 8.12 II> Thailan -0.36 -4.71 <.SE -0.23 -3.99 d TI> (Reporting by John Biju in Bengaluru; Editing by Michael Perry and Mrigank Dhaniwala)