By Rajasik Mukherjee

June 23 (Reuters) - Asian equities retreated on Tuesday from recent record highs, with shares in South Korea plunging more than 6% and triggering a temporary trading curb, as investors rushed out of risk assets on prospects of U.S. interest rate hikes.

The MSCI EM Asia equities index .MIMS00000PUS dropped 1.4% from an all-time high on Monday, dragged lower by declines in South Korea .KS11 and Taiwan .TWII, which together account for about 60% of the benchmark.

South Korea's KOSPI .KS11 slumped 6.6%, prompting a volatility-triggered trading halt, as investors locked in profits after a strong rally in chip stocks.

Shares of major chipmakers Samsung Electronics 005930.KS and SK Hynix 000660.KS fell between 4% and 6%.

Taiwan's benchmark gauge .TWII, another AI-heavy index in the region, slipped 1.2% from an all-time closing high seen the previous day. TSMC 2330.TW, the world's top contract chipmaker, was on track for a second consecutive record close.

Meanwhile, traders are grappling with expectations of an accelerated schedule of rate hikes by a more aggressive U.S. Federal Reserve under the leadership of new Chair Kevin Warsh.

Fed funds futures are pricing in a 75% chance of a rate hike by September, while BofA Global Research and Deutsche Bank have abandoned prior forecasts of steady policy and now expect the U.S. central bank to raise rates within the year, citing economic resilience.

"The Fed was perceived more hawkish than expected and markets have reacted by lifting the USD, against most currencies," said Fiona Lim, senior FX strategist, Maybank Singapore.

"Our house view is for the Fed to stand pat this year and hawkish positioning to unwind, potentially bringing the USD lower eventually."

The dollar index =USD, which measures the greenback against a basket of major currencies, edged slightly higher to 101.01, hovering close to the one-year high of 101.13 touched last week.

The firm dollar weighed on most emerging Asian currencies, which weakened across the board. The Philippine peso PHP= led losses, slipping 0.4% to 61.134 per dollar, its lowest level since June 12 and on track for a sixth consecutive session of declines.

Thailand's baht THB=TH shed as much as 0.5% to a 13-month low of 33.095 per dollar, a day ahead of the central bank meeting. The Bank of Thailand is widely expected to keep its rates steady, according to a Reuters poll.

Elsewhere, Indonesian markets also came under pressure. Shares in Jakarta .JKSE fell more than 1%, while the rupiah IDR= weakened to 17,860 per dollar, ahead of MSCI's verdict on the country's market classification, due in early Asian hours on Wednesday.

The Philippine equity benchmark gauge .PSI jumped 1.6%, rebounding from a six-session low in the previous day. In Malaysia, stocks .KLSE edged lower, while the ringgit MYR= rebounded from a seven-month low to trade 0.2% higher at 4.138.

HIGHLIGHTS:

** Yield on Indonesia's 10-year govt bonds ID10YT=RR jumps 8.9 bps to 7.218%

** Philippines cuts 2026 growth forecast, citing graft scandal and energy crisis

** Singapore's DBS Bank prices $2 billion three-year dollar covered bond

** Indonesia plans to embed AI in key programmes, including $15 billion free-meal drive, document shows

Asia stock indexes and currencies at 0444 GMT
COUNTRY	FX RIC	FX DAILY %	FX YTD %	INDEX	STOCKS DAILY %	STOCKS YTD %
Japan	JPY=	-0.02	-3.05	.N225	-1.62	37.31
China	CNY=CFXS	-0.01	+3.10	.SSEC	-0.37	4.50
India	INR=IN	-0.01	-5.09	.NSEI	0.11	-7.66
Indonesia	IDR=	-0.20	-6.66	.JKSE	-1.20	-30.11
Malaysia	MYR=	+0.19	-1.98	.KLSE	-0.32	0.91
Philippines	PHP=	-0.23	-3.79	.PSI	1.61	1.31
S.Korea	KRW=KFTC	+0.33	-6.15	.KS11	-6.02	103.26
Singapore	SGD=	-0.06	-0.63	.STI	0.25	12.29
Taiwan	TWD=TP	+0.07	-0.54	.TWII	-0.63	63.79
Thailand	THB=TH	-0.33	-4.81	.SETI	-0.74	24.04