* Dollar pulls away from recent 2-week high vs yen
* Worries about global trade tensions simmer
* NZ dollar falters after weaker than expected GDP data
By Masayuki Kitano
SINGAPORE, March 15 (Reuters) - The dollar fell against the yen on Thursday and pulled further away from a recent two-week high, as lingering worries about global trade tensions weighed on investors’ risk appetite.
The dollar shed 0.4 percent to 105.94 yen. That was down from Tuesday’s peak of 107.30 yen, the U.S. currency’s highest level against the yen since Feb. 28.
Market participants remain concerned about increased protectionism under U.S. President Donald Trump’s administration, with U.S. equities having fallen on Wednesday after Trump sought to impose fresh tariffs on China.
“The fear of an escalating trade war with China has global markets on edge with investors taking a defensive posture,” Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore said in a note.
Against this backdrop, the safe haven yen has gained support, Innes added.
The Trump administration is pressing China to cut its trade surplus with the United States by $100 billion, the White House said on Wednesday.
In addition, Larry Kudlow, the incoming director of the White House national economic council, said on Wednesday that China has earned a tough response from the United States and other countries on trade, even though he has previously criticised “blanket” tariffs.
In an interview with CNBC, Kudlow said he would like to see the dollar a “wee bit stronger than it is currently.”
Kudlow added that a strong and stable dollar was important for U.S. economic health and that he had no reason to believe Trump disagreed.
Kudlow’s comments on the dollar are unlikely to have much of an impact at this juncture, said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore, adding that persistent worries over U.S. protectionism could continue to weigh on the greenback.
“The main focus is on any actions that Trump might take,” Okagawa said.
On the economic front, U.S. retail sales data on Wednesday did not really help the dollar. Sales fell, offsetting a stronger-than-forecast rise in domestic producer prices last month.
That should further prompt the Federal Reserve to raise interest rates at a gradual pace. The market still expects the Fed to raise rates three times this year, starting at next week’s monetary policy meeting.
The dollar index, which measures the greenback against a basket of six major peers, held steady on the day at 89.667 . The dollar index has shed roughly 0.5 percent so far this week.
The euro edged up 0.1 percent to $1.2377. The common currency, however, remained below Wednesday’s near one-week high of $1.2413.
The euro had sagged on Wednesday after European Central Bank President Mario Draghi struck a dovish tone in his speech.
Draghi said the ECB needs further evidence that inflation is rising towards its target but is growing more confident it is on track to do so.
Elsewhere, the New Zealand dollar fell 0.2 percent to $0.7316, coming under pressure after mixed New Zealand economic growth data cemented bets on interest rates staying at record lows for a long time yet. (Reporting by Masayuki Kitano; Editing by Sam Holmes)