GLOBAL MARKETS-Stocks slip amid US trade policy uncertainty, bond selloff eases

• European stocks down 0.9%
• Bond sell off abates
• Euro heading for best week since 2009
• Confusion over Trump's tariffs leaves investors on tenterhooks
• Focus on US non-farm payrolls data, Powell's speech

LONDON/SINGAPORE, March 7 (Reuters) - Stocks in Europe and Asia slipped on Friday, with investors still edgy at the end of a week marked by confusion over U.S. trade policy and a global rise in borrowing costs, although a steep selloff in bonds abated.

European stocks .STOXX fell 0.9%, on track for a weekly loss after 10 straight weekly gains, with luxury stocks and retailers .SXRP weighing heavily.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 0.6%, with Japan's Nikkei .N225 falling to a six-month low.

Still, a sharp selloff in euro zone government bond markets triggered by Germany's plans for a huge spending package showed signs of tapering. After the biggest two-day fall in Bunds since the 1970s, the benchmark 10-year bond yield DE10YT=RR, which moves inversely to prices, fell 5 basis points to 2.84%.

The euro, boosted by the rising euro zone borrowing costs, was set for its best week since 2009. EUR=EBS

Financial markets were focused on a U.S. non-farm payrolls report and a speech from Federal Reserve Chair Jerome Powell, due later in the day, which could provide more clarity on the outlook for interest rates in the world's biggest economy.

Wall Street has this week faced headwinds from a darkening outlook for U.S. growth and uncertainty over President Donald Trump's tariff policies, with the Nasdaq .IXIC on Thursday confirming a correction since peaking in December.

Trump on Thursday suspended tariffs of 25% he had imposed this week on most goods from Canada and Mexico, the latest twist in a fluctuating trade policy that has whipsawed markets.

"With this being a delay rather than a lasting exemption and with reciprocal tariffs also expected to be announced after April 2, this leaves plenty of lingering tariff uncertainty," Deutsche Bank analysts wrote.

U.S. stock futures regained some lost ground, with Nasdaq NQc1 futures rising 0.3% and S&P 500 futures ESc1 adding 0.2%.

RISK OFF

Overall, however, the mood was risk off.

Chinese bluechip stocks .CSI300 fell 0.5%. Data on Friday showed China's imports unexpectedly shrank in January and February, while exports lost momentum, as escalating U.S. tariff pressures cast a shadow over the recovery in the world's second-largest economy.

"This slowdown comes before any substantial hit from tariffs, which will almost certainly lead to sharp falls in shipments to the U.S. before long," said Julian Evans-Pritchard, head of China economics at Capital Economics.

Government bonds elsewhere extended their selloff, though. The 10-year Japanese government bond (JGB) yield JP10YTN=JBTC rose 1.5 basis points to 1.53%, its highest level since June 2009.

Investors sold riskier currencies such as the Australian dollar AUD=D3, which fell as much as 0.5% to $0.62995. Perceived safe havens were in demand, with the yen JPY=EBS up 0.5% to 147.81 against the dollar.

The Swiss franc CHF=EBS struck a three-month top of 0.88125 against the dollar. Gold XAU= hovered near a record high at $2,922.75 an ounce XAU=.

The euro EUR=EBS was set for its largest weekly gain since 2009 at 4.3%. It last traded 0.6% higher at $1.084.

The European Central Bank on Thursday cut interest rates again but warned of "phenomenal uncertainty," including the risk of rising inflation due to trade tensions and defence spending. 0#ECBIRPR

Risk-sensitive bitcoin BTC= fell a smidgeon to $88,439. Trump signed an executive order on Thursday to establish a so-called strategic bitcoin reserve, built using tokens already owned by the U.S. government that were forfeited during criminal or civil asset forfeiture proceedings.