LONDON (Reuters) - Traders were marking five years since COVID first rocked world markets and one month since Donald Trump's return to the White House started shaking up the global order on Thursday - and there was plenty to keep tabs on.

Record-high gold was nearing $3,000 per ounce on concerns Trump will unleash a global trade war, the yen stomped higher on bets of more BOJ interest rate hikes, while Ukraine's bonds tumbled on worries about its future.

The dollar had been weakened overnight by news the Federal Reserve's policymakers had discussed slowing or pausing the drawdown of its bloated balance sheet and stocks hit the brakes as the tariff warnings offset Wall Street's latest record high. [.N]

Saxo Bank's John Hardy said the day's big move was the yen's pacey rise. It hit a more than two-month high against the dollar and briefly dropped below 150. It was also up more than 1% versus the euro and set for its biggest daily jump since late January.

"I'm just wondering whether this a bit of a lightbulb moment for traders," Hardy said.

Key inflation data is due in the coming days, "there is a geopolitical angle there too perhaps in that they don't want to get attention from the Trump administration for their exceedingly low policy (interest) rate.

European stocks edged up in morning trading, as upbeat corporate updates in the industrial and insurance sectors offset declines in energy and healthcare stocks.

Germany's DAX ticked up 0.6% as data there showed that producer prices rose less than expected in January.

Europe's biggest economy is also bracing for a snap election at the weekend, following the collapse of Chancellor Olaf Scholz's three-way coalition, with analysts anticipating a Conservative-led two-party coalition.

DICTATOR TRADE

U.S. futures pointed to a more muted open later with both the S&P 500 and Nasdaq pointing 0.3% lower.

Trump's latest tariff warning on Wednesday focused on pharmaceuticals, semiconductor chips and wood. He also intends to hit car imports as soon as April 2.

That along with other threats has exacerbated fears of a broad trade war, leaving investors nervous.

Ukraine's government bonds took another tumble too after Trump had caused widespread alarm on Wednesday when he called Ukrainian President Volodymyr Zelenskiy a "dictator" and that he needed to grab a ceasefire deal quickly or risk having no country left.

"Uncertainty about the Fed's policy and Trump's tariffs will continue to rattle markets," 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"

In Asia, Japan's Nikkei slid 1.5% on the strong yen, while a blistering rally in Chinese technology shares took a breather. [.HK]

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.

Gold prices showed no signs of slowing though. They rose to a fresh record high of $2,947 an ounce, reaching a new peak for the tenth time this year. The precious metal is now up 12% in 2025 after rising 27% last year, its best performance in over a decade.

In the oil markets Brent crude futures were little changed at $76 a barrel while wheat prices extended their gains to a fifth session, underpinned by worries that cold weather in Russia, Ukraine and the U.S. could crimp supply.