* Markets seen to have mostly priced in U.S. tariff implementation
* Focus on how China would retaliate
* Beyond trade issues, investors look to US jobs data for cues
By Shinichi Saoshiro
TOKYO, July 6 (Reuters) - Major currencies trod water early on Friday as investor caution prevailed ahead of Washington’s implementation of its threatened tariffs on Chinese goods and the U.S. jobs report due later in the day.
The United States is due to begin collecting tariffs on $34 billion in Chinese goods at 0401 GMT on Friday. Focus has shifted to how China will retaliate and the potential volatility that could cause in the global financial markets.
“As Wall Street’s gains have shown, the markets have been able to price in the tariff implementation for the most part. But there is always the risk of President Trump tweeting something out of the blue, and we also have to worry about the subsequent tariffs,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo.
U.S. President Donald Trump warned that subsequent rounds of tariffs could apply to more than $500 billion of Chinese goods - roughly the amount that the United States imported from China last year as the world’s two largest economies hurtled toward the start of a trade war.
The dollar index against at basket of six major currencies was a shade lower at 94.362 after slipping to 94.177, its lowest since June 26, the previous day.
The greenback had come under pressure from a buoyant euro. The euro gained on Thursday on strong German industrial orders and as Washington softened its trade rhetoric towards European Union automakers.
The single currency was steady at $1.1694 after rising 0.3 percent overnight, when it touched $1.1721, its strongest since June 26. It was on track to end the week little changed.
The dollar was 0.1 percent lower at 110.570 yen, having been caught in a relatively narrow 111.14-110.27 range through the week.
“Participants will be looking to shift their attention from trade matters to the U.S. non-farm payrolls and if the jobs report is strong, dollar/yen stands poised to rise and break out of its recent range,” Ishizuki at Daiwa said.
The U.S. Labor Department is expected to report nonfarm payrolls increased 195,000 in June after surging by 223,000 in May. Monthly average hourly earnings likely rose 0.3 percent, which would lift the annual increase to 2.8 percent from 2.7 percent in May.
The pound was effectively flat at $1.3225. It had risen to a nine-day peak of $1.3275 on Thursday after Bank of England Governor Mark Carney said he was confident an economic slowdown was temporary, but the rise faded on nervousness before Friday’s government meeting on Brexit policy.
China’s yuan was little changed in offshore trade after dipping 0.2 percent the previous day.
The yuan had retreated to an 11-month low earlier in the week amid trade concerns before pulling back on assurances by China’s central bank. (Editing by Sam Holmes)