* Dollar falls to lowest vs yen since April
* Trump legislative failures, valuations worry Wall Street
* Dollar falls vs yen with stocks
* Volatility seen pushing traders out of short-yen bets (Updates to U.S. market open, adds data, quote, changes dateline, previous LONDON)
By Dion Rabouin
NEW YORK, Aug 18 (Reuters) - The dollar fell to a four-month low against the Japanese yen on Friday as investors sought out the safe-haven currency in light of uncertainty about the White House’s ability to push through its economic agenda.
The yen was the major mover among developed world currencies. It rose nearly 1 percent against the dollar as nervousness over stock market valuations and the future of an eight-year global rally seeped into other assets.
Concerns about whether U.S. President Donald Trump can get Congress to pass the pro-growth measures that financial investors had expected at the start of this year turned U.S. stocks lower for the fourth straight day. On Thursday, the benchmark S&P 500 stock index had its biggest one-day loss in three months.
That drove investors into the traditional security of the yen, with worries about another attack claimed by Islamic State in Barcelona feeding into the rising uncertainty.
Trump’s response to a white supremacist march in Charlottesville, Virginia, that left one woman dead has drawn widespread condemnation, even from within his Republican party. It is the latest news that investors say distracts from his campaign pledges to cut taxes and reinvest in U.S. infrastructure.
The dollar recovered somewhat after a stronger-than-expected reading on U.S. consumer sentiment from the University of Michigan but remained lower on the day.
The dollar was last down 0.75 percent against the yen at 108.72 yen. It fell 0.1 percent against the Swiss franc to 0.9618 after touching a one-week low.
“With President Trump’s support from both within and outside of the White House waning, the uncertain U.S. political environment is likely to keep the dollar pinned down at these low levels,” said strategist Viraj Patel of ING in London.
“It is difficult to find any other domestic catalyst to more than offset this negative factor.”
The yen’s lurch higher, from nearly 111 per dollar on Wednesday to below 109 on Friday, has largely stemmed from technical trading and an increase in volatility, said Tim Alt, fund manager for rates and currencies at Aviva Investors in Chicago.
The headlines have forced traders with bets on a weaker Japanese currency and stronger dollar to reverse their positions, he added.
“In (times of) low volatility ..., selling or being short the yen is considered to be attractive,” Alt said. “And as we’re seeing a little bit more jitters, volatility pick up a little bit, I think there’s been some questioning of that.” (Additional reporting by Masayuki Kitano in SINGAPORE; Editing by Andrew Roche and Lisa Von Ahn)