* China narrowing scope for trade deal - Bloomberg
* Dollar loses momentum despite Friday's upbeat jobs data
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Hideyuki Sano
TOKYO, Oct 7 (Reuters) - The yen gained slightly and the
yuan slipped a tad in early Asian trade on Monday on a media
report that China wants the scope of this week's trade talks and
any deal with the United States to be narrow.
Bloomberg reported that Chinese officials are signalling
they are increasingly reluctant to agree to a broad trade deal
pursued by U.S. President Donald Trump. That report knocked down the dollar against the yen during
thin early Monday trade to as low as 106.55 yen JPY= .
The U.S. currency has so far found some support around a
one-month low of 106.48 touched last week.
It last traded at 106.82 yen JPY= , down 0.11% from late
Friday U.S. levels.
The yuan weakened about 0.20% in offshore trade to 7.1285
yuan per dollar CNH= . There was no onshore trading as Monday
is the last day of China's holiday break for its national day.
Yukio Ishizuki, senior strategist at Daiwa Securities, said
he believes the impact of the media story "will not last long,
with U.S.-China trade talks due later this week, ahead of a
planned tariff hike on Oct. 15."
Top-level U.S.-China trade talks are scheduled to resume
Thursday and Friday, when Chinese Vice Premier Liu He meets U.S.
Trade Representative Robert Lighthizer and Treasury Secretary
Steven Mnuchin in Washington.
Trump last month delayed hiking levies on $250 billion worth
of Chinese imports to 30% from current 25% to Oct 15. from
originally scheduled Oct. 1 "as a gesture of good will".
"The United States probably does not want to raise tariffs
given recent signs of softening in the U.S. economy, and markets
hope for some sort of deal that allows them to keep talking in
the future," Ishizuki said.
Last week saw a string of soft U.S. economic data that
raised doubts on the assumption by many that the U.S. economy
will be more resilient than other economies to damage from
Sino-U.S. trade war.
Such worries eased slightly after U.S. September non-farm
payrolls data on Friday came in fairly strong and the jobless
rate fell to near a 50-year low. But that did little to change market expectations that the
Fed will cut likely interest rates at its next policy review on
Oct. 29-30 to support the economy.
Sentiment about the dollar is further complicated by the
uncertain U.S. political outlook, as Trump faces an impeachment
inquiry in the U.S. House of Representatives.
As the dollar has lost momentum, the euro stood at $1.0982
EUR= , up 0.02% in Asia, recovering little by little after
having hit a near 2 1/2-year low of $1.0879 last Tuesday.
Sterling traded little changed at $1.2336 GBP=D4 , with
uncertainties on Brexit keeping many investors on the sideline.
Britain's Brexit minister said the UK is open to some
flexibility on the proposed mechanism that would allow lawmakers
in post-Brexit Northern Ireland to decide whether the British
province remains in regulatory alignment with the European
Union. With less than a month until the U.K.'s scheduled exit on
Oct 31, British Prime Minister Boris Johnson is seeking
significant changes to how the most contentious issue - the
border between British-ruled Northern Ireland and EU member
Ireland - was dealt with in the divorce deal agreed by his
predecessor, Theresa May, almost a year ago.
The European Union and Ireland said last week that the
proposals were unlikely to yield a deal.