* MSCI Asia ex-Japan hits the lowest since mid-February
* Dollar near lowest since November 2016 vs yen
* Trump's tariff threat met with warnings of retaliation
* Italian exit polls point to hung parliament
By Swati Pandey
SYDNEY, March 5 (Reuters) - Asian shares stumbled to nearthree-week lows on Monday amid fears of a global trade war,while the euro was unsteady in currency markets due to worriesthat an anti-establishment coalition government could emergefrom elections in Italy.
Italian voters delivered a hung parliament on Sunday,flocking to anti-establishment and far-right parties in recordnumbers and casting the euro zone's third-largest economy into apolitical gridlock that could take months to clear. a see-saw start, the common currency EUR= eased backto $1.2323 from a two-week high of $1.2365 as the eurosceptic5-Star Movement saw its support soar to become the largestsingle party, according to projections based on earlyvote-counting.
"The messy Italian election result adds a bit to thenervousness to global equity markets at present," said ShaneOliver, Sydney-based chief economist at AMP.
"The Italian election...does run the risk of making Italy'spublic finances worse than they already are with no progress inaddressing Italy's long-term competitiveness problems."
The euro still found support after Germany's Social Democratparty decisively backed the renewal of an alliance with Chancellor Angela Merkel's conservatives, allowing her to form anew government more than five months since the country'sinconclusive election. single currency also got a lift from safe-haven flows,as did the yen, with risk sentiment souring on fears of a tradewar after U.S. President Donald Trump proposed tariffs onimported steel and aluminium.
The dollar fell for a fourth straight session to tradearound 105.49 yen, but was slightly above Friday's low of105.23, a level not seen since November 2016. JPY=
The dollar index, which measures the greenback against abasket of currencies, was mostly unchanged. .DXY
"Nothing's happened over the weekend to soften concernsabout trade wars or retaliatory actions by other countries,"said Ray Attrill, head of forex strategy at National AustraliaBank.
"There is no rowing back so that gets us to a cautiousstart."
Canada and Mexico have threatened retaliation, and theEuropean Union said it would apply 25 percent tariffs on about$3.5 billion of imports from the United States if Trump carriedout his threat. said on Sunday it did not want a trade war with theUnited States but will defend its interests, warning thatpolicies based on "mistaken assumptions" will damage bilateralrelations. SHARES
Investors fear the current momentum in the global econmycould be lost if Trump starts a trade war.
Asian markets were a sea of red with MSCI's broadest indexof Asia-Pacific shares outside Japan .MIAPJ0000PUS falling 0.8percent to the lowest since mid-February. It lost more than 2percent of its value last week.
Japan's Nikkei .N225 and South Korea's KOSPI .KS11 bothlost 0.7 percent, while Chinese shares eased too after startingon a positive note. .CSI300 .SSEC
U.S. stock futures did not inspire much confidence, with S&PE-Minis ESc1 down 0.5 percent and Dow futures 1YMc1 off 0.4percent.
"Frustration with a lack of market access and a lack of fairtrade are understandable," said Peter Jolly, global head ofresearch for National Australia Bank.
"If this escalation draws that into focus with someimprovement, that would be positive. But retaliatory tit-for-tatmeasures would weigh against market access, a cost to growthwith increases in trade prices, costs, and inflation."
Investors will focus on a deluge of data this week,culminating in the U.S. non-farm payrolls on Friday. The annualopening of the National People's Congress in China was anotherfocus for investors. China's parliament has kept the economy'sgrowth target at 6.5 percent for this year. commodities, oil prices climbed ahead of a meetingbetween OPEC and U.S. shale firms in Houston, raisingexpectations that oil producers would discuss further how toclear a global glut. crude was up 30 cents at $64.67 a barrel while U.S.light crude CLc1 added 47 cents to $61.64.
Spot gold XAU= climbed 0.3 percent to $1,325.96.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^MSCI and Nikkei chart
http://reut.rs/2sSBRiD
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Simon Cameron-Moore)