* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* Nikkei fall 2.3%, Asia shares ex-Japan -0.8%

* Yen gains, yields dive amid safe-haven rush

* Yuan under pressure as trade war escalates

* Gold jumps to highest since April 2013, oil slides

By Wayne Cole

SYDNEY, Aug 26 (Reuters) - Asian shares were a sea of red on Monday as the latest salvo in the Sino-U.S. trade war shook confidence in the world economy and sent investors steaming to the safe harbours of sovereign bonds, gold and the Japanese yen.

Yields on benchmark 10-year Treasury debt dropped to their lowest since mid-2016, while gold hit its highest since April 2013 as risk was shunned.

The Chinese yuan also came under pressure, with the dollar quoted up at 7.1710 and markets braced for more intervention from Beijing to support the currency.

MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.8%, and Australia 1.7%.

Japan's Nikkei lost 2.3%, while E-Mini futures for the S&P 500 were down 1.0%.

Wall Street nose-dived on Friday when President Donald Trump announced a 5% additional duty on $550 billion in targeted Chinese goods, hours after China unveiled retaliatory tariffs on $75 billion worth of U.S. products.

At the G7 meeting in France over the weekend, Trump caused some confusion by indicating he may have had second thoughts on the tariffs.

But the White House said on Sunday that Trump wished he had raised tariffs on Chinese goods even higher last week, even as he signalled he did not plan to follow through with a demand that U.S. firms close operations in China.

Trump is now set to hold a joint news conference with French President Emmanuel Macron later on Monday.

"There is an uneasy feeling that the very fragile negotiations are spiralling out of control," wrote analysts at ANZ in a note.

"The escalation suggests uncertainty will continue to weigh on global trade, industrial production and investment, with no sign of a resolution."

The latest broadside overshadowed a pledge by Federal Reserve Chair Jerome Powell to "act as appropriate" to keep the U.S. economy healthy, although he stopped short of committing to rapid-fire rate cuts.

The markets clearly believe, however, the Fed will have to act aggressively and are fully priced for at least a quarter-point cut in September and more than 110 basis points of easing by the end of 2020.

"Trump shows no signs of moderating his destructive trade policies," said JPMorgan analyst Adam Crisafulli.

"Central banks can't fully ameliorate the downside of a global trade war," he added. "Companies will enter lockdown mode in terms of spending, and eventually hiring, until at least the November 2020 election amid all the uncertainty."