* Dollar dips vs yen on lingering U.S.-China trade woes
* Euro weighed down by European election concerns
* US terminates Turkey’s preferential trade deal, lira falls
* Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh
By Tom Finn
LONDON, May 17 (Reuters) - The Japanese yen strengthened on Friday, attracting safe-haven buying due to lingering concerns among investors about trade tensions and impending European Parliament elections.
Currency moves in response to recent U.S.-Chinese trade hostilities have been fairly muted but traders have bid up the yen, considered a safe haven in times of stress because of Japan’s status as the world’s largest creditor.
“Despite yesterday’s rebound, we are still reluctant to trust a long-lasting reversal in risk appetite. With the U.S. (verbally) attacking China, and China willing to respond, we cannot assume that the worst is behind us,” said Charalambos Pissouros, a senior market analyst at JFD Brokers.
The euro is under pressure from concerns about next week’s European parliamentary elections and comments from Italian Deputy Prime Minister Matteo Salvini.
Salvini said on Thursday that he would “tear apart” EU budget rules that were “strangling” Italy if his party did well in the elections.
“Italy remains one of the factors keeping euro downside risks high,” said Credit Agricole FX strategist Manuel Olivieri.
The euro was steady at $1.1178 after falling to $1.1166 overnight, its lowest since May 6. It has fallen 0.5% this week.
The dollar, meanwhile, has also benefited as a safe-haven currency even as the United States and China remain locked in a trade dispute.
It was bolstered on Thursday by data that showed U.S. homebuilding increased more than expected in April.
On Friday, it held near a two-week high against its peers, supported by the strong data and a bounce in Treasury yields.
The dollar index against a basket of six major currencies stood little changed at 97.802 after reaching 97.882 on Thursday, its highest since May 3.
The Chinese yuan weakened as far as 6.9450 against the dollar, its weakest level since Nov. 30.
The Australian dollar stretched overnight losses and fell to a new 4-1/2-month trough of $0.6883. The Aussie had suffered big losses the previous day after soft domestic employment data raised expectations of an interest rate cut by the Reserve Bank of Australia.
Australia holds a parliamentary election on Saturday but analysts said U.S.-China tensions were likely to remain the biggest influence on its currency.
Reporting by Tom Finn; Editing by Kevin Liffey