* Mueller investigation adds to U.S. political worries
* Signs of growing U.S. protectionism alarm investors
By Hideyuki Sano
TOKYO, March 16 (Reuters) - Asian stocks were on the defensive on Friday as worries over the U.S. investigation into the Trump Organization tested investor nerves, already frayed by fears U.S. tariffs could hurt the global economy and trigger a trade war.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.2 percent in early trade. Japan's Nikkei .N225 was down 0.3 percent.
On Wall Street, the S&P 500 .SPX edged 0.08 percent lower on Thursday, marking its first four-day losing streak of 2018.
It hit a session low soon after the New York Times reported that U.S. Special Counsel Robert Mueller had issued a subpoena for documents related to U.S. President Donald Trump's businesses. added to growing U.S. political uncertainties following the recent departure of two key officials, former Secretary of State Rex Tillerson and top economic advisor Gary Cohn, from the Trump administration.
The report earlier this week that Trump is seeking to impose tariffs on up to $60 billion of Chinese imports cemented investor concerns that the administration is increasingly leaning towards protectionism. seems as if for Trump, only 'America First' policies are left to boost his popularity and to get re-elected," said Hiroko Iwaki, senior strategist at Mizuho Securities.
"It is hard to expect political uncertainties to disappear soon. That will underpin bonds," she added.
U.S. Treasuries yield stood little changed at 2.826 percent US10YT=RR in Asia after having hit near two-week low of 2.797 percent.
In Europe, German Bund yield DE10YT=TWEB hit a six-week low of 0.566 percent.
Political uncertainties are not unique just to the United States. In Japan, Prime Minister Shinzo Abe is under pressure for suspicions of a cover-up in the government's controversial land sale. the currency market, rising risk aversion pushed the dollar lower against the safe haven yen to 106.22 yen JPY= down 0.1 percent in early Asian trade.
The euro was little changed at $1.2303 EUR= , having slipped 0.5 percent the previous day.
Oil prices were little changed after ending choppy Thursday trade higher as the International Energy Agency said global oil demand is expected to pick up this year, but warned supply is growing at a faster pace.
Brent futures LCOc1 stood flat at $65.11 per barrel.
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