* Dollar near lowest since November 2016 vs yen
* MSCI Asia ex-Japan near lowest since mid-February
* 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 hovered near 2-1/2week lows and the safe-haven yen rose on Monday amid fears of aglobal trade war, while the euro pared gains as investorsworried Italy's national elections could deliver ananti-establishment government.
Italy's poll produced no outright winner on Sunday,according to exit polls that pointed to possible politicalgridlock, with voters backing anti-establishment and far-rightparties in record numbers. a see-saw start, the euro EUR= eased back to $1.2320from a two-week high of $1.2365 amid talk the eurosceptic 5-starparty could form a coalition government.
Supporting the euro was the revival of Germany's grandcoalition over the weekend, meaning Chancellor Angela Merkel'sconservatives will form a new government more than five monthssince the country's inconclusive election. market remains extremely choppy," said Stephen Innes,head of trading at OANDA.
"The results are initially interpreted as mildly supportivefor the euro given the worst case scenario - theanti-establishment coalition in office was averted - but isreversing out the initial wave of positivity," Innes added."...the market will look to fade upticks given the politicalmalaise in Italy will play on."
The yen got a lift from safe-haven flows as risk sentimentsoured after U.S. President Donald Trump proposed tariffs onimported steel and aluminium, rattling financial markets.
The dollar fell for a fourth straight session to stand at 105.60 yen, but was slightly above Friday's low of 105.23, alevel not seen since November 2016. JPY=
Asian shares started the week on the backfoot despite a laterebound on Wall Street on Friday as investors worried a U.S.-ledtrade war could derail economic momentum around the world.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was flat near the lowest since mid-February.
Japan's Nikkei .N225 slipped 0.2 percent while SouthKorea's KOSPI .KS11 was flat and Australian shares .AXJO declined 0.3 percent.
U.S. stock futures did not inspire much confidence, with S&PE-Minis ESc1 down 0.1 percent.
News over the weekend suggested that Trump was going aheadwith his threat, while there was no indication that allies wouldbe excluded from the tariffs planned on imported steel andaluminium.
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. says the tariffs are needed to protect domesticindustries against unfair competition from China and elsewhere.
"Despite staging a comeback, major U.S. indexes sufferedtheir worst week since early February," said James McGlew,executive director for corporate stockbroking at Perth-basedArgonaut.
"A number of other fears linger as investors reassess theprospects for continued global growth, brace for the possibilityof a broader trade war and await the outcome of a parliamentaryelection in Italy."
In commodities, Brent crude was up 35 cents at $64.72 abarrel while U.S. light crude CLc1 edged up 34 cents to$61.59.
Spot gold XAU= was a tad firmer at $1,323.53.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^MSCI and Nikkei chart
http://reut.rs/2sSBRiD
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Kim Coghill and Sam Holmes)