* Market focus also on U.S.-China talks, U.S. jobs data
* Euro slumps after dovish hints from ECB’s Draghi
* U.S. jobs report expected to show March rise of 180,000
TOKYO, April 7 (Reuters) - The dollar skidded against the safe-haven Japanese yen on Friday after the United States launched cruise missiles at an airbase in Syria, raising concerns of a sharp escalation in the Syrian civil war.
U.S President Donald Trump said on Thursday he ordered missile strikes against a Syrian airfield from which a deadly chemical weapons attack was launched.
The dollar index, which gauges the greenback against a basket of six major rivals, was down slightly on the day at 100.66, up 0.3 percent for the week.
Against the yen, which tends to gain in times of geopolitical tension or risk aversion, the dollar erased its early modest gains and dropped 0.3 percent to 110.44 yen, down 0.8 percent for the week.
“The fact that the dollar hasn’t broken under 110 on this news shows how strong that level is, but we are still waiting to see Russia’s reaction to the U.S. move,” said Ayako Sera, senior market economist at Sumitomo Mitsui Trust.
The U.S. military gave Russian forces advanced notice of its strikes and did not hit sections of the base where the Russians were believed to be present, a Pentagon spokesman said on Thursday.
“The news of the attack on Syria, and the resulting risk averse mood, has overtaken the U.S. jobs report as the main focus of the day,” she added.
Later on Friday, the U.S. nonfarm payrolls report is expected to show an increase of 180,000 jobs in March, compared with 235,000 in February, according to economists polled by Reuters, which could reinforce expectations that the Federal Reserve will deliver two more interest rate increases this calendar year.
Falling U.S. Treasury yields also undermined the dollar. The benchmark 10-year yield touched its lowest levels since November, and last stood at 2.310 percent in Asian trading, down from its U.S. close of 2.343 percent.
The U.S. air strike came during a two-day summit between Trump and Chinese President Xi Jinping, and will add a new dimension to their talks.
The meeting had a strong focus on trade and North Korea’s military programme. Trump had warned that he would be ready to act unilaterally to address North Korea’s nuclear program if China does not step up to help in the matter.
Trump’s domestic policy agenda was put in the spotlight on Thursday, when U.S. House of Representatives Speaker Paul Ryan said tax reform would take longer to accomplish than healthcare reform. Ryan said that Congress and the White House were initially closer to agreement on healthcare legislation than on tax policy.
Currency policy was also in focus, after an administration official told Reuters that “misalignment” was seen as more significant than “currency manipulation” as a cause of trade deficits.
“Currency misalignment is different from currency manipulation and currency undervaluation,” the official said. “So we want to see a process of analysing currency situations that includes whether it’s misaligned, not just whether it’s devalued or manipulated.”
The euro was slightly lower on the day at $1.0643, after dovish comments from European Central Bank President Mario Draghi helped push it to a three week low of $1.0629 overnight. It was down 0.1 percent for the week.
Draghi said on Thursday that he does “not see cause to deviate” from the ECB’s stated policy path, which includes bond buying at least until the end of the year and record-low rates until well after that to stimulate inflation.
Against the yen, the euro slumped 0.4 percent to 117.53 after dropping as low as 117.30 yen earlier, its deepest pit since late November. (Reporting by Tokyo markets team; Editing by Shri Navaratnam and Eric Meijer)