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Euro hits 5-month peak, rouble at 7-month high

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S&P 500 flirts with confirming market correction

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Nikkei steadies after slide to 6-month trough

(Updates to Asia afternoon)

By Tom Westbrook

SINGAPORE, March 12 (Reuters) - The euro was riding near

five-month highs on Wednesday on Ukraine's readiness to accept a

month-long ceasefire, while stocks whipsawed on back-and-forth

U.S. tariff plans as levies on steel and aluminium imports

kicked in.

European equity futures jumped 1.1% and FTSE

futures rose 0.5% on news the U.S. would restore

military aid and intelligence sharing to Ukraine after Kyiv

agreed to accept a U.S. ceasefire proposal.

Russian Foreign Minister Sergei Lavrov said in an interview

published on Wednesday, speaking in the context of a possible

Ukraine peace deal, that Moscow will avoid compromises that

would jeopardise people's lives, Russian agencies reported.

The euro hit its highest since October on Tuesday

at $1.0947 and was steady at $1.0913 in Asia trade. Russia's

rouble rose to a seven-month high on the previous day.

U.S. steel and aluminium tariffs of 25% took effect on

Wednesday - with fairly muted effect on the share prices of

Asian steel mills - and drew counter-tariffs from Europe.

MSCI's broadest index of Asia-Pacific shares outside Japan

was flat but fragile. Australia's benchmark

closed 9.6% below February's record high.

Markets in Hong Kong and China were broadly

steady, South Korea and Taiwan bounced and

Japan's Nikkei held its ground after slumping to a near

six-month low a day earlier.

On Wall Street the S&P 500 had flirted with notching

a 10% fall from February's record closing high, and finished a

volatile session about 0.8% lower.

President Donald Trump threatened then backed down from a

doubling of steel and aluminium tariffs on Canada to 50%, after

Ontario suspended plans for a surcharge on exported electricity.

The dollar has sunk, Treasuries have rallied and lately

stocks have suffered their heaviest selling in months as traders

worry tariffs and policy uncertainty will hurt U.S. growth.

"Where we stand now is with a heightened concern about the

U.S. economy, not having yet taken our model forecast down, but

having put in a roughly 40% recession risk into the outlook for

the year," J.P. Morgan chief global economist Bruce Kasman told

reporters in Singapore.

"If the U.S. goes into recession, then we enter into a more

complicated story, because then you have to recognise that U.S.

spillovers to the rest of the world tend to be very large

through financial channels."

Investors nervous about the economy punished downbeat

financial results from retailers, with Dick's Sporting Goods

stock diving 5.7% on a dour outlook and Kohl's Corp

shares plummeting 24% after reporting a drop in sales.

Travel stocks also took a beating after Delta Air Lines ( DAL )

cut its profit forecast in half and rivals United

and American Airlines ( AAL ) warned of deteriorating

results, falling government bookings and uncertainty weighing on

demand.

Later in the day U.S. inflation data for February is due,

though it is likely to be too early to show much of a tariff

hit.

A central bank meeting in Canada will be closely watched to

see what monetary policymakers on the front line of Trump's

trade war are thinking. A seventh consecutive rate cut -- seen

as only an even chance two weeks ago -- is priced into the

market.

The Canadian dollar hit a one-week low overnight

before recovering to C$1.445 per dollar. U.S. equity futures

ticked 0.2% higher.

The yen inched down from a five-month high to

trade around 148 per dollar. The risk-sensitive Australian

dollar was pinned just below 63 U.S. cents and Brent

crude futures were held just under $70 a barrel.

(Editing by Shri Navaratnam)