CORRECTED-FOREX-Yen falls, yuan gains as U.S.-China trade truce lifts risk appetite

(Corrects title of analyst in ninth paragraph)
* Yen, Swiss franc sag after Trump, Xi agree to resume talks
* Offshore yuan at highest levels since early May
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Shinichi Saoshiro
TOKYO, July 1 (Reuters) - The yuan gained and the safe-haven
yen slid against the dollar on Monday as appetite for
risk-sensitive currencies improved after the United States and
China agreed to restart their troubled trade talks.
The dollar rose 0.25% to 108.190 yen JPY= , extending its
recovery from near a six-month low of 106.78 set last Tuesday.
After meeting Chinese President Xi Jinping in Japan on
Saturday on the sidelines of Group of 20 summit, U.S. President
Donald Trump said he would hold back on tariffs and that China
will buy more farm products. Trump also said the U.S. Commerce Department would study
over the next few days whether to take Huawei HWT.UL off the
list of firms banned from buying components and technology from
U.S. companies without government approval.
"Most of the discussions that took place between the United
States and China at the G20 had already been anticipated, but
the mention of Huawei was a bit of a surprise," said Yukio
Ishizuki, senior currency strategist at Daiwa Securities.
"There were more dollar short positions than expected, and
these are being covered. But once these shorts are covered, the
dollar's advance is likely to slow ahead of the non-farm jobs
report."
Economists polled by Reuters expect U.S. non-farm payrolls,
which will be released on Friday, to have risen to 160,000 in
June from 75,000 in May.
Other key U.S. data due this week include Wednesday's
Institute of Supply Management's (ISM) non-manufacturing
activity index for June.
"Focus now shifts to U.S. fundamentals with the G20 over,"
said Koji Fukaya, president at Office Fukaya Consulting.
"Some Fed officials curbed easing views recently and the
data will help the market get a clearer picture of whether the
Fed stands poised to cut rates this month."
At a June 18-19 policy meeting the Federal Reserve opened
the door for possible interest rate cuts later this year. But
comments last week from central bank officials, including Chair
Jerome Powell, had cooled expectations for aggressive rate cuts.
The Swiss franc, another safe-haven currency, fell 0.4% to
0.9801 franc to the dollar CHF= .
Offshore Chinese yuan was up 0.3% at 6.8470 per dollar
CNH=D4 after brushing 6.8166, its highest level since May 9.
Supported by the greenback's rise against the yen, the
dollar index .DXY against a basket of six major currencies
added 0.25% to 96.352.
Against a broadly stronger dollar, the euro fell 0.15% to
$1.1351 and the Australian dollar declined 0.35% to $0.7001
AUD=D4 .
The Turkish lira TRYTOM=D4 was up 0.7% at 5.7431 per
dollar after Turkish President Tayyip Erdogan said over the
weekend that the United States did not plan to impose sanctions
on Ankara for buying Russian defence systems. The U.S. Treasury 10-year yield US10YT=RR was up about 3.5
basis points at 2.031%, putting some distance between a
2-1/2-year low of 1.974% plumbed on June 20.

(Editing by Sam Holmes & Shri Navaratnam)