(Rewrites to update prices, add analyst comment, changes byline, dateline; previous LONDON)
* Trump/Xi meeting in focus, with trade, FX likely on agenda
* Yen hits 4-month high vs euro on risk-off sentiment
* Dollar/yen hits week's low
* Aussie slips on RBA views on labour and inflation
By Gertrude Chavez-Dreyfuss
NEW YORK, April 4 (Reuters) - The safe-haven yen rose to a one-week high against the dollar and a 4-1/2 month peak versus the euro on Tuesday, as investors grew cautious about a possibly contentious meeting between U.S. President Donald Trump and Chinese President Xi Jinping.
Trump vowed during his campaign to label China a currency manipulator on his first day in office.
While that has not happened, a CNBC report last week said the Trump administration was reviewing the scope of its power to penalize countries whose currencies it perceives as undervalued. The report provided no details about how that would be done.
"In terms of U.S. trade policy and the Trump/Xi meeting, it's always difficult to know what components of FX the two will focus on or what specific measure they will be looking at in order to amp up the rhetoric on currency manipulator," said Brad Bechtel, managing director FX at Jefferies in New York.
He added that it was "unclear if it will even come up this week at all given it's more of a Treasury function to call these things than it is a presidential function."
Markets also reacted to a bombing on Monday in a St. Petersburg metro, had an eye on U.S. employment data this week and France’s presidential election later this month.
In late morning trading, the dollar fell 0.4 percent to 110.49 yen, after earlier sliding to a one-week low of 110.27.
Tuesday's data was largely positive for the dollar. The U.S. trade deficit in February narrowed more than expected to $43.6 billion in February, a number that could boost first-quarter growth.
U.S. factory orders in February also rose 0.1 percent, expanding for a third straight month.
The euro, meanwhile, dropped against the yen, off 0.5 percent at 117.78 yen. Earlier, the euro fell as low as 117.43, the lowest since Nov. 22.
Japan's main Nikkei stock index, which tends to move inversely to the yen, closed down 0.9 percent to a 10-week low.
The euro fell to a three-week trough earlier and was last at $1.0657, down 0.1 percent.
Meanwhile, the Reserve Bank of Australia's decision to keep interest rates at a record low of 1.5 percent was a surprise. But the Aussie dollar fell after the RBA hinted it was not too confident about domestic labor and inflation conditions.
The Aussie hit a three-week low of U$0.7545, having declined steadily over the past two weeks from a four-month high of U$0.7750.
Reporting by Gertrude Chavez-Dreyfuss in New York and Ritvik Carvalho in London; editing by Alexander Smith and Grant McCool