*

A U.S. Treasury selloff intensifies concerns over U.S.

assets

*

Safe-havens in demand as equity markets skid again

*

Yen climbs, Swiss franc scales 6-month top on dollar

(Recasts, adds comments, background)

By Stefano Rebaudo and Wayne Cole

April 9 (Reuters) -

The U.S. dollar dropped sharply versus safe-haven currencies

and the euro as investors fretted about the economic impact of

U.S. tariffs, which spooked world equity markets.

Major stocks indexes sank, while a savage selloff in

Treasuries sparked fears

foreign funds were fleeing U.S. assets

.

President Donald Trump showed no sign of backing off with

Washington confirming 104% duties on imports from China would

take effect at 12:01 a.m. Eastern Time (0401 GMT), as planned.

China on Wednesday released a White Paper on its trade

and economic ties with the United States, reiterating that it

would

take countermeasures

following higher tariffs on Chinese goods.

"One of the reasons why the dollar is suffering the most

from additional tariffs on China is that markets feel the lack

of immediate substitutes for some Chinese products means even

greater inflationary and recessionary risks for the U.S.," said

Francesco Pesole forex strategist at ING arguing that the "'sell

America' scenario is becoming tangible again."

The greenback dropped 0.8% against safe haven yen

at 145.09 and 0.4% versus the Swiss Franc after hitting a

fresh 6-month low at 0.8379.

The euro also jumped, helped by reports Germany's

conservatives had reached a deal with the centre-left Social

Democrats to form a government, easing political concerns in the

EU's largest economy.

The single currency added 0.8% to $1.1044,

creeping back to last week's peak at $1.1147.

"U.S 30-year bonds sold off with yields rising and swap

spreads surging to a new record above 96 basis points," said

Hauke Siemssen, rate strategist at Commerzbank, mentioning

"possible vulnerability of the US Treasury plumbing."

The U.S. dollar 10-year OIS Treasury swap spreads

were last at -100.3 bps.

The dollar was down 0.6% versus the yuan offshore at 7.38

, after reaching an all time high at 7.4288, and all

eyes are on China's central bank to see whether it allows a

further easing at its daily fix.

"Weakness in the renminbi continues to reflect building

speculation over the potential for bigger devaluation in

response to the intensifying trade war between the US and

China," said Lee Hardman, senior currency analyst at MUFG.

Worries about a U.S. downturn were pressuring the dollar

elsewhere as markets returned to pricing 104 bps of rate cuts

from the Federal Reserve this year.

"Our top FX expression is to be long yen given U.S.

stagflation fears, exacerbated by Trump's aggressive reciprocal

tariffs and tit-for-tat escalations, and the sharp selloff in

equities," wrote analysts at Nomura in a note.

"Beyond the yen's relative safe-haven status, Japan's macro

backdrop remains relatively strong and rate differentials are

expected to continue to favour JPY."

Bank of Japan Governor Kazuo Ueda suggested the chance of a

pause in interest rate hikes as U.S. tariffs jolt markets.