(Updates to Asia mid-afternoon)

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Trump's tariff plans, geopolitical worries sap sentiment

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Chinese tech stocks drop after a blistering rally

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Safe-haven yen hits over two-month high

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Gold hits all-time high

By Ankur Banerjee

SINGAPORE, Feb 20 (Reuters) - Global stocks treaded with

caution on Thursday, with Asian shares feeling the heat as U.S.

President Donald Trump's tariff plans, geopolitical worries and

a cautious stance from Federal Reserve policymakers hurt risk

sentiment.

The risk-off mood lifted gold prices to a record high, while

the safe-haven Japanese yen firmed to its highest level since

early December against the dollar.

European futures pointed to a muted open on

Thursday, a day after the pan-European STOXX 600 index

dropped nearly 1%, its biggest daily drop in two months. Futures

for S&P 500 and Nasdaq eased 0.3%.

Trump through the week has vowed tariffs on wide-ranging

imports including pharmaceuticals products, semiconductor chips

and lumber. He intends to impose tariffs on autos as soon as

April 2.

That along with other threats has exacerbated fears of a

broad trade war, leaving investors nervous, although some

analysts see the moves by Trump as negotiating tactics.

Market jitters escalated on geopolitical worries after Trump

alarmed European officials by denouncing Ukrainian President

Volodymyr Zelenskiy as a "dictator", amid U.S. talks with Russia

to end the Ukraine war.

The yen hit an over two-month high against the

dollar and was last up 0.9% at 150.065 per dollar. The yen has

risen more than 4% against the dollar this year boosted by

rising odds of the Bank of Japan hiking rates again in 2025.

"Uncertainty about the Fed's policy and Trump's tariffs

will continue to rattle markets and keep investors on edge, with

no end in sight in the short term," said Vasu Menon, managing

director of investment strategy at OCBC Bank in Singapore.

"Investors must come to terms with the fact that

volatility will be more elevated this year ... There are valid

reasons to remain sanguine about the investment outlook

especially for those with the risk appetite and patience."

In Asia, Japan's Nikkei slid 1.5% on the strong yen,

while a blistering rally in Chinese technology shares

took a breather.

Hong Kong's Hang Seng Index slipped 1.3%, having

touched a four-month high earlier this week boosted by tech

stocks in the wake of Chinese startup DeepSeek's breakthrough.

Trump's initial policy proposals raised concern at the Fed

about higher inflation, with firms telling the U.S. central bank

they generally expected to raise prices to pass along the cost

of import tariffs, according to the Fed's January meeting

minutes released on Wednesday.

"Trump's policies ... no doubt added complexity to the Fed's

balancing act between inflation and employment, forcing

policymakers to lean into a wait-and-see approach," said Yeap

Jun Rong, market strategist at IG.

"That said, with market expectations already well aligned

for a rate hold over the next two FOMC meetings, the minutes

served more as confirmation of existing sentiment."

Traders are pricing in 39 basis points of cuts this year

from the Fed with the next move fully priced in for September,

LSEG data showed.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

eased 0.16% to 107.06. The euro was steady at $1.0428.

Gold prices rose to a fresh record high of $2,947.11 an

ounce, reaching a new peak for the tenth time this year. The

yellow metal is up 12% so far in 2025 after rising 27%

last year, its strongest annual performance in over a decade.

Oil prices eased away from a one-week high while wheat

extended gains to a fifth session to trade near its highest

close since October, underpinned by worries that cold weather in

Russia and the U.S. could damage the crop.