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GLOBAL MARKETS-Shares barely budge amid uncertainty over Trump's economic agenda

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* Asian shares little changed amid uncertainty in Washington

* Dollar struggles, U.S. bond yields near 2-month lows

* Investors wary as U.S.,South Korea begin military drills

TOKYO, Aug 21 (Reuters) - Asian shares were tentative in early Monday trade as investors remained unconvinced about U.S. President Donald Trump's ability to fulfil his economic agenda, even as the departure of his controversial policy strategist raised hopes of some progress.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.07 percent while Japan's Nikkei was off 0.4 percent.

S&P Mini futures were flat at 2,427, not far from its one-month low of 2,419.5 touched on Friday.

Wall Street shares got only a short-lived boost on Friday after Trump fired White House chief strategist Steve Bannon.

"Markets seem to think that the administration will remain fragile and its ability to carry out its policies will be hampered even after Bannon's departure," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

Although Bannon's departure removes a major source of friction within the White House, Trump's attacks on fellow Republicans following violence in Virginia earlier this month isolated him, prompting some Republicans to beginning questioning Trump's capacity to govern.

Investors were also wary of any flare-up of tensions between North Korea and United States as U.S. troops and South Korean forces will start a joint exercise on Monday.

Tech-heavy Korean shares - one of the best performers globally for much of this year - have lost momentum since last month, partly on worries about escalating tensions in the Korean Peninsula.

In the currency market, the dollar was also hampered by political uncertainty in Washington.

Against the yen, the dollar fetched 109.22 yen, not far from Friday's four-month low of 108.605.

The euro stood at $1.1715, stuck in its rough $1.17-$1.18 range in the past two weeks, as investors look to European Central Bank chief Mario Draghi's comments later this week at a meeting of the world's central bankers in Jackson Hole.

Federal Reserve Chair Janet Yellen's keynote speech at the Jackson Hole symposium will also be a main attraction for markets.

Comments last week from Fed officials suggested the stock market's steady rise, still low long-term bond yields and a sagging dollar are girding the Fed's intent to raise interest rates again this year despite concerns about weak inflation.

"People focus on inflation but in the Fed's minutes policymakers spend a lot of time discussing whether bond yields are too low or asset prices are too high. If Yellen questions market stability, markets will expect a tighter policy," Hiroko Iwaki, senior bond strategist at Mizuho Securities.

The 10-year U.S. Treasuries yield slipped to as low as 2.162 percent on Friday - its lowest since late June - and last stood at 2.203 percent.

Oil prices held their big gains made on Friday on the back of a fall in U.S. drillers' rig counts.

U.S. crude futures were unchanged at $48.48 per barrel while Brent futures were down slightly at $52.60 per barrel.

(Editing by Shri Navaratnam)