SINGAPORE, March 11 (Reuters) - The yen was investors'

safe harbour of choice on Tuesday and it traded near five-month

highs as fears about a tariff-driven slowdown in U.S. growth

have rattled U.S. stocks and the dollar.

The Nasdaq fell 4% overnight and the S&P 500

slid 2.7% as equities caught up with a big rally in U.S. bonds,

moving on the risk that U.S. economic growth slows down.

The yen touched a five-month peak of 146.625 per dollar

and was last trading at 146.85.

Other moves in the currency market were more muted, but the

lack of flight to the dollar - which has been sinking in recent

weeks - was noteworthy, according to analysts.

The overnight drop in the risk-sensitive Australian dollar

was a modest 0.4% and it last bought $0.6272. Sterling

was holding on above its 200-day moving average at

$1.2875 and the euro was steady just above $1.08.

There were falls in the Canadian dollar and Mexican peso -

the economies whose exports are to bear the brunt of U.S.

tariffs - but they were modest.

The Canadian dollar was last steady around C$1.44

per dollar and the peso was at 20.34 per dollar. China's

yuan was steady at 7.26 per dollar in early offshore

trade on Tuesday.

"Historically, the dollar outperforms when we get a solid

rise in volatility, but when the U.S. economy and U.S. equity

market is the central point of concern, this is now limiting the

attractiveness of the dollar," said Chris Weston, head of

research at broker Pepperstone in Melbourne.

The turmoil in equities seemed to be triggered by a Donald

Trump Fox News interview, in which the president talked about a

"period of transition" and declined to predict whether his

tariffs on China, Canada and Mexico would result in a U.S.

recession.

The dollar index, however, had already notched its

largest weekly drop in more than two years last week as selling

tracked a fall in U.S. bond yields and the euro leapt on German

plans to reform a brake on borrowing.

"The market is unsure whether fading U.S. exceptionalism

will continue to hurt the dollar or whether the dollar benefits

from its safe-haven status," said Bank of Singapore strategist

Sim Moh Siong, noting any extension of selling in stock markets

may lead safe-haven dollar buying to finally kick in.

The dollar index was mostly flat overnight as small rises

against the Aussie and sterling were offset by losses on the yen

and it settled at 103.89.

Germany's Greens overnight vowed to block plans for a

massive increase in state borrowing to revamp the military, but

forwarded rival proposals in a bid for compromise and the euro

handed back none of its massive gains from last week.

U.S. bonds, however, rallied, pushing down yields at a time

when global yields are spiking.

In a week, the gap between 10-year U.S. and German yields

has shrunk 33 basis points and the gap between

U.S. and Japanese yields has shrunk 17 bps.

(Reporting by Tom Westbrook; Editing by Lincoln Feast.)