* Yen up across the board in choppy trading
* Trumps threatens China with higher, more tariffs
* U.S. stocks futures dive, Treasuries well bid
By Wayne Cole
SYDNEY, May 6 (Reuters) - The safe-haven yen jumped in early Asian trading on Monday after U.S. President Donald Trump threatened to increase tariffs on China, sending risk assets into a spin and slamming stock futures.
Trump on Sunday increased pressure on China to reach a trade deal by announcing he will hike U.S. tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon.
The announcement via Twitter marks a major shift in tone from Trump, who has cited good progress in the talks and praised his relationship with Chinese President Xi Jinping.
Investors responded by bidding up the yen which is considered a safe harbour in times of stress given Japan’s status as the world’s largest creditor and its huge assets abroad.
The dollar initially fell to a five-week trough at 110.53 on Reuters dealing, having ended Friday around 111.12. It was last at 110.71, with the market again thin as Japan remains on holiday.
The euro hit its lowest since January at 123.44 yen , before steadying around 123.84. The single currency was a touch lower on the dollar at $1.1183, while the dollar index was little changed at 97.536.
The Australian dollar took a spill given the country’s exposure to Chinese trade and lost around 0.6 percent at one stage to $0.6960. It was last holding at $0.6986.
“An increase in tariffs would be bad news for risk assets and would threaten the prospect of a global growth recovery,” said Rodrigo Catril, a senior FX strategist at NAB.
“AUD and NZD are lower at the open as we await for Asian markets to open,” he added. “An aggressive response from China that halts current negotiations, with higher tariffs by the end of the week would be a disaster for risk assets.”
As a taste of what was to come, E-Mini futures for the S&P 500 slid 1.57 percent in early trade and Treasury futures jumped 17 ticks.
The U.S. dollar had already softened on Friday when jobs data beat expectations but a soft reading for wages meant the Federal Reserve could afford to stay patient on policy. (Reporting by Wayne Cole; Editing by Andrea Ricci)