* Dollar slips vs yen as risk sentiment wobbles
* Euro firmer, inches away from 3-week lows
* But euro poised for first weekly drop since early July
By Masayuki Kitano
SINGAPORE, Aug 18 (Reuters) - The dollar slipped versus the yen on Friday, hampered by renewed investor concerns over the Trump administration’s ability to push forward its economic policy agenda.
The dollar fell 0.2 percent to 109.33 yen, pulling further away from this week’s high of 110.95 yen that had been set on Wednesday.
Analysts said the yen, which is regarded as a safe haven in times of financial market turbulence, could add to its gains if global equities fall further, in the wake of a selloff in U.S. shares on Thursday.
The yen often comes into favour in times of market stress, partly due to the notion that Japanese investors might eventually repatriate their overseas assets if such market turmoil persists.
“If we do get another one or two weeks of risk-off, I would expect yen to be on the stronger side,” said Tan Teck Leng, forex analyst for UBS Wealth Management in Singapore.
Escalating worries about the Trump administration’s ability to push through its economic agenda have rattled investors this week. On Thursday, the U.S. S&P 500 slid 1.5 percent for its biggest daily percentage drop in three months.
Such concerns had initially come to the fore after U.S. President Donald Trump disbanded two high-profile business advisory councils on Wednesday, after several chief executives quit in protest over his remarks blaming weekend violence in Virginia on anti-racism activists as well as white supremacists.
How European and U.S. equity markets fare on Friday could prove crucial for the dollar’s near-term outlook against the yen, said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo.
“There is the risk that the yen might keep edging higher,” he said.
“If the dollar falls below 109 yen, that could set the stage for a test of its year-to-date low of 108.13 yen,” Murata said, referring to a trough the dollar hit in mid-April.
The euro edged up 0.1 percent to $1.1734 but was down 0.7 percent for the week, putting it on track for its first weekly decline since early July.
The euro had tumbled to a three-week low of $1.1662 on Thursday, after the minutes of the European Central Bank’s July 20 policy meeting showed policymakers were worried that the repricing of the currency could overshoot.
The ECB minutes led to some profit-taking in the euro, said Heng Koon How, head of market strategy for United Overseas Bank in Singapore, adding that the euro is likely to attract bargain-hunting interest on any drop towards $1.15.
“Euro is a buy on dips,” Heng said, adding that the common currency is likely to be supported by expectations for the ECB to outline, later this year, its plans on the tapering of its asset-buying programme. (Reporting by Masayuki Kitano; Editing by Kim Coghill)