* MSCI Asia-Pacific index down 0.25 pct, Nikkei falls 0.2pct
* Cohn's departure seen as tilting U.S. towardsprotectionism
* Dollar falls vs yen, Swiss franc; Canada dlr, Mexico pesofall
* U.S. stock futures down more than 1 pct
* Crude oil slips, gold extends rally amid risk aversion
By Hideyuki Sano and Shinichi Saoshiro
TOKYO, March 7 (Reuters) - Global stocks 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 and setthe downbeat tone for Asia.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.25 percent.
Australian stocks .AXJO fell 0.75 percent and Japan'sNikkei .N225 retreated 0.2 percent.
"If you're looking for an excuse to sell, this is the kindof announcement that certainly causes short-term downwardpressure," said Rick Meckler, president of investment firmLibertyView Capital Management in New Jersey, regarding Cohn'sresignation.
"He (Cohn) came from Wall street and certainly largeinstitutional investors felt he was very credible in his spot."
South Korea's KOSPI bucked the trend and rose 0.3 percentamid a perceived easing of regional tensions, following news onTuesday that South Korea would hold its first summit with theNorth in more than a decade.
Cohn's resignation, however, poured cold water on a recoveryin risk appetite in wider markets that followed news of theinter-Korean talks.
In the currency market, the dollar fell as much as 0.6percent to 105.45 yen JPY= , near its 16-month low of 105.24touched on Friday. The dollar had risen to 106.470 on Tuesdayamid speculation that Trump could be coaxed away from imposingtariffs.
Against the Swiss franc, the dollar also shed 0.3 percent to0.9375 franc CHF= , while the euro edged up 0.05 percent to$1.2412 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 0.5 percent to C$1.2936 per dollar CAD=D4 while the Mexican peso dropped 0.5 percent to 18.83 tothe dollar MXN=D2 .
Crude oil prices fell as investor risk appetite in thebroader markets cooled, with Brent futures LCOc1 surrenderingthe previous day's gains to drop 0.85 percent to $65.24 perbarrel.
Spot gold XAU= stretched the previous day's rally andtouched $1,340.42 an ounce, highest since Feb. 26.
Other safe havens like government bonds also fared well.U.S. Treasury debt prices rose and as a result the 10-yearbenchmark note yield US10YT=RR declined 2 basis points to2.858 percent.
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