TOKYO: Chinese stocks stumbled on Tuesday, dragging Asian peers with them, as Beijing did not unveil large stimulus plans to support the economy at the start of its week-long annual session of parliament, the National People's Congress.

Equities markets in the region were already on the back foot following a retreat from record highs on Wall Street on Monday, on signs the U.S. Federal Reserve is in no hurry to cut interest rates. U.S. stock futures also pointed lower.

Bitcoin continued its ascent to a fresh two-year peak of $68,828 that put it within spitting distance of an all-time high. Gold marked a record closing high of $2,114.99 on Monday and continued to hover near that level.

The Chinese government 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.

It also unveiled plans to issue 1 trillion yuan ($139 billion) in special ultra-long term treasury bonds, which are not included in the budget.

Early announcements from the NPC suggest "large fiscal stimulus is off the table for now," said James Kniveton, senior corporate FX dealer at Convera.

"Stability is still the overriding factor in Chinese policy making, and the announcements so far seem to conform to that philosophy."

The Shanghai Composite Index was trading flat after recovering early losses, but Hong Kong's Hang Seng deepened early declines to slump 2.4%.

Japan's Nikkei slid 0.42% after reaching a fresh peak on Monday.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.7%.

Meanwhile, alternative assets such as cryptocurrencies and bullion have been supported and equities sold following hawkish comments from Atlanta Fed President Raphael Bostic that there was no urgency to cut interest rates amid the risk inflation stays above the central bank's 2% target.

Those remarks frayed nerves ahead of Fed Chair Jerome Powell's semi-annual testimony to Congress later in the week, as well as a deluge of key data on prices and jobs, culminating with Friday's non-farm payrolls report.

"There are signs of slight irrational exuberance and maybe a squeeze of long-suffering shorts in some markets," particularly bitcoin and gold, said Kyle Rodda, senior markets analyst at

"The moves have come despite only a minor shift in rates market pricing."

Odds for a U.S. rate reduction by the Fed's May meeting declined below 22% from 26% a day earlier, according to CME Group's FedWatch Tool.

The dollar index, which measures the currency against six major peers, edged up 0.02% to 103.86. It eased 0.07% on Monday, as declines against rivals like the euro and sterling overshadowed gains against the yen.

The euro was little changed at $1.0850, after advancing 0.14% on Monday, with the European Central Bank due to set policy on Thursday. Traders are convinced it will keep rates steady at the meeting, but futures imply an 88% probability that cuts will start in June.

Sterling was steady at $1.26895, following a 0.3% rise at the start of the week, in the run-up to Wednesday's UK budget. Finance Minister Jeremy Hunt has been trying to dampen speculation about big pre-election tax cuts.

Against the yen, the dollar was stable at 150.465, following Monday's 0.27% climb. The currency pair tends to be extremely sensitive to moves in long-term U.S. bonds, and benchmark 10-year Treasury yields bounced from 2-1/2-week lows overnight to sit at 4.22%.

Elsewhere, crude oil continued to tick lower, as demand headwinds counterbalanced a widely expected extension of voluntary output cuts through the middle of the year by the OPEC+ producer group.

Brent futures were off 10 cents to $82.70 a barrel, while U.S. West Texas Intermediate (WTI) eased 17 cents to $78.57 a barrel. ($1 = 7.1975 Chinese yuan)

(Reporting by Kevin Buckland; Editing by Sam Holmes and Jacqueline Wong)