* Cohn's departure seen as tilting U.S. towards protectionism
* Dollar falls vs yen, Swiss franc; Canada dlr, Mexico pesofall
* U.S. stock futures down more than 1 pct
TOKYO, March 7 (Reuters) - U.S. stock futures and the dollarslumped on Wednesday after a key advocate for free trade in theWhite House announced his resignation, fanning fears PresidentDonald Trump would go ahead with tariffs and risk a trade war.
White House economic adviser Gary Cohn, seen as a bulwarkagainst protectionist forces within the Trump administration,said on Tuesday he was leaving. 500 futures ESc1 dropped more than one percent inearly Wednesday trade.
In the currency market, the dollar fell as much as 0.6percent against the yen to 105.48 yen JPY= , near its 16-monthlow of 105.24 touched on Friday.
Against the Swiss franc, the dollar also shed 0.4 percent to0.9365 franc CHF= , while the euro ticked 0.15 percent to$1.2422 EUR= .
"The worst outcome for financial markets, in terms ofpotential to create volatility, would be a confirmation ofrising trade friction and benign neglect of the dollar in theshort term," said analysts at ANZ.
The Canadian dollar and the Mexican peso tumbled as Cohn'sdeparture was seen as raising risks Washington could walk out ofNAFTA.
The Canadian dollar fell 0.4 percent to C$1.2920 per dollar CAD=D3 while the Mexican peso dropped 0.6 percent to 18.85 tothe dollar MXN=D2 .
Cohn's resignation poured cold water on a recovery in riskappetite following news on Tuesday that South Korea would holdits first summit with the North in more than a decade.
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