* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Shanghai shares skid as Trump targets Huawei
* Asia index ex-Japan hits 15-week trough
* Yen edges higher as mood turns risk averse
* Bitcoin suddenly tumbles, then pares losses
By Wayne Cole
SYDNEY, May 17 (Reuters) - Asian shares suffered a fresh bout of the shakes on Friday as tough words on trade from China's media drowned out upbeat news on the U.S. economy and corporate earnings.
Shanghai stocks led the way into the red amid the growing fallout from President Donald Trump's move to block China's Huawei Technologies HWT.UL from buying vital American technology. sense of foreboding grew as the Communist Party's People's Daily used a front page commentary to evoke the patriotic spirit of past wars, saying the trade war would never bring China down. is hard to get too excited as the news flows in the trade front points to an escalation rather than an ease in tensions," said Rodrigo Catril, senior FX strategist at National Australia Bank.
"Many commentators are suggesting the decision on Huawei and other Chinese telecos effectively means the President has taken the 'nuclear option' and it has now moved towards a 'fully-fledged' tech war with China."
Shanghai blue chips .CSI300 fell 2.1%, while the offshore yuan CNH=D3 eased past 6.9400 per dollar for the first time since November, 2018.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost early gains to fall 0.7%, leaving it at 15-week lows and down 2.6% for the week.
Japan's Nikkei .N225 did manage to bounce 0.9%, while the main Australian index .AXJO climbed to an 11-year peak as higher commodity prices boosted miners.
But E-Mini futures for the S&P 500 ESc1 shed 0.36% and European stock futures STXEc1 FFIc1 FDXc1 pointed to opening losses.
Sentiment had been briefly soothed overnight by better U.S. economic news, with U.S. housing starts surprisingly strong and a welcome pickup in the Philadelphia Federal Reserve's manufacturing survey. results from Walmart (NYSE:WMT) WMT.N burnished the outlook for retail spending, though the giant chain also warned that tariffs would raise prices for U.S. consumers. the earnings season winds down, of the 457 S&P 500 companies reporting about 75% have beaten profit expectations, according to Refinitiv data.
The Dow .DJI ended Thursday with gains of 0.84%, while the S&P 500 .SPX added 0.89% and the Nasdaq .IXIC 0.97%. .N
POUND GROUND DOWN
The chillier tone in Asia helped Treasuries recoup early losses as the session wore on, with the 10-year futures contract TYc1 firming 7 ticks.
The U.S. dollar lost a little of its shine on the safe haven yen to stand at 109.64 JPY= from a top of 110.03. Against a basket of currencies, it was a shade softer at 96.824 .DXY .
Yet the euro could make no ground and held at $1.1173 EUR= , down 0.5% for the week so far.
Sterling was one of the worst performers as Britain's Prime Minister Theresa May battled to keep her Brexit deal, and her premiership, intact amid growing fears of a disorderly departure from the European Union. GBP/
The pound touched a three-month low of $1.2783 GBP=D3 and was down a hefty 1.6% for the week so far.
Also under pressure was the Australian dollar, losing 1.5% for the week to $0.6890 AUD=D3 as investors piled into bets that interest rates would be cut in June. main mover in Asia was cyber currency Bitcoin BTC=BTSP which tumbled over 20% at one stage for no discernible reason. It was last down 7%.
In commodity markets, spot gold steadied at $1,287.34 per ounce XAU= as risk sentiment soured.
Oil futures firmed into a fourth session as rising tensions in the Middle East stoked fears of potential supply disruptions. O/R
U.S. crude CLc1 was last up 14 cents at $63.01 a barrel, while Brent crude LCOc1 futures rose 12 cents to $72.74.
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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Kim Coghill & Shri Navaratnam)