* Asia tracks Wall Street slide, European shares attempt recovery
* Safe-haven yen rises to six-week high vs dollar
* Risk aversion supports bonds, U.S. 10-yr yield at 1-mth low
* New Zealand cuts interest rates, kiwi weakens
By Virginia Furness
LONDON, May 8 (Reuters) - World shares tumbled towards five-week lows on Wednesday as renewed trade tensions and concern over the strength of the global economy drove investors to the safety of bonds and the Japanese yen, with the latter hitting a six-week high against the dollar.
Wall Street looked set to open sharply lower, with S&P 500 futures down almost half a percent ESc1 following Tuesday's steep falls, when trade-sensitive industrial and technology sectors were slammed by fears a potential U.S.-China trade deal could unravel.
Nasdaq and Dow Jones futures NQc1 YMC1 too were 0.3 percent to 0.5 percent lower.
Chinese Vice Premier Liu He is due to visit Washington on Thursday and Friday for trade talks in a last-ditch bid to avert a sharp increase in tariffs on Chinese goods ordered by U.S. President Donald Trump. However, optimism over some kind of agreement was undermined after Reuters quoted sources as saying Beijing had backtracked on most aspects of the deal. think it's a major risk that Trump raises tariffs," said Christophe Barraud, chief strategist at brokerage Market Securities in Paris.
"If that happens we can imagine that negotiations will break down, implying another few months of uncertainty... All in all, bonds as well as other safe-havens such as yen, look set to benefit from this situation in the short-term."
European shares slid 0.3 percent .STOXX while MSCI's Asia-Pacific share index excluding Japan .MIAPJ0000PUS was down almost 1 percent earlier to touch its lowest level since late-March.
Colin Harte, head of research, multi asset solutions at BNP Paribas (PA:BNPP) Asset Management described the trade situation as a "quasi-Cold War."
"That was a jolt to the markets. The market assumed there was no serious threat, and it suddenly woke up this week to find that the whole thing could be derailed," Harte said.
Market jitters have been exacerbated by the mixed nature of recent economic data from China as well as other big economies. Chinese trade data showed solid imports but an unexpected fall in April exports. The figures follow lacklustre economic data in Europe, signs of steep inventory build-ups in the United States and subdued manufacturing surveys worldwide. was also bad news on the British front, where broadcaster ITV (LON:ITV) reported Brexit talks between the two opposition parties were very close to being terminated. drove sterling half a percent lower while 10-year Gilt yields dropped six basis points to 1.098 percent GB10YT=RR .
BONDS BENEFIT
Underscoring policymakers' fears for economic growth, New Zealand cut interest rates, becoming the first country in the developed world to do so since the Fed turned tail on policy earlier this year.
The decision pushed the kiwi dollar NZD=D4 to a six-month low, while government bonds jumped, sending yields 5-7 basis points lower across the curve. can see why the reserve bank is easing rates, but how powerful will that be?," Harte said. "The days of the central bank cavalry riding to the rescue are over."
On currency markets, investors' demand for safe-havens boosted the Japanese yen 0.2 percent against the dollar at 110.02 yen JPY=EBS , taking its gains to more than 1 percent this month.
Bonds too have benefited from the worries for growth and trade, with 10-year yields on U.S. Treasuries US10YT=RR , German bunds DE10YT=RR and Japanese government bonds (JGBs) falling to five-week lows.
Germany's 10-year government bond yield, the benchmark for the bloc, hovered near five-week lows at -0.059 percent, not far from the 2-1/2 year low of -0.094 percent DE10YT=RR while Japan's 10-year yield burrowed deeper into negative territory. JP10YTN=JBTC .
While the growth gloom pressured commodity markets, oil prices were bolstered by the surge in Chinese crude imports as well as U.S. sanctions on crude exporters Iran and Venezuela. Brent crude oil futures held .LCOc1 at $70.31 per barrel, 43 cents, or 0.6 percent above their last close.