* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* British parliament approves Brexit deal, but rejects
timetable
* Traders search for positives amid Brexit chaos
* Currencies look for clues on U.S.-China trade war
By Stanley White
TOKYO, Oct 23 (Reuters) - The pound edged lower on Wednesday
after an overnight fall as Brexit hung in the balance, with the
British Parliament still divided on how, when or even if to
engineer Britain's departure from the European Union.
The yen rose against the U.S. dollar and the Australian
dollar as some investors sought a safe haven amid doubts about
Brexit and efforts to de-escalate a bruising trade war between
the United States and China.
A decline in equities and a rise in U.S. Treasury prices in
Asia underscored investors' aversion to taking on big risks as
the drama over Britain's departure from the EU grows
increasingly complex by the day.
On Tuesday, British lawmakers voted by 329 to 299 in favour
of Prime Minister Boris Johnson's Brexit plan, but then opposed
Johnson's extremely tight timetable to complete the legislative
process in three days by 322 to 308 votes. It is now up to the EU to decide whether to extend Britain's
Oct. 31 deadline for its departure from the bloc, although there
is hope Britain can avoid the worst case scenario of leaving the
EU without any deal in place.
With no major economic data scheduled in Asia on Wednesday,
traders will be left to ponder whether Britain will hold a
general election to break the impasse.
Investors are also closely watching for signs of a thaw in
the U.S.-China trade war, which has cast a shadow over financial
markets and global economic growth.
"The pound will adjust in a narrow range for the time
being," said Junichi Ishikawa, senior foreign exchange
strategist at IG Securities in Tokyo.
"For now, the risk of a no-deal Brexit has receded, but
there are still political uncertainties."
The pound GBP=D3 fell 0.16% to $1.2856 after a 0.7% drop
on Tuesday.
Against the euro, the pound EURGBP=D3 eased to 86.55 pence
following a 0.5% decline in the previous session.
Sterling initially rose on Tuesday after parliament approved
a second reading of the Brexit deal, but then fell after
lawmakers rejected the timetable.
It was the first time parliament has signalled support for a
deal on how Britain would leave the EU, but Johnson had warned
prior to the votes that he would push for an election if his
timetable for Brexit were defeated.
The dollar index .DXY against a basket of six major
currencies stood at 97.545, holding on to a 0.2% gain posted on
Tuesday.
The U.S. currency JPY=EBS fell 0.15% to 108.32 yen. The
Australian dollar AUDJPY=EBS , whose fortunes are closely tied
to global trade and commodity prices, gave up 0.32% to 74.16
In the onshore market, the yuan CNY=CFXS traded at 7.0842
per U.S. dollar, weaker than its previous close of 7.0778. In
the offshore market, it CNH=D3 eased slightly to 7.0841.
Treasury prices rose in Asia as some investors sought safe
havens, which pushed the yield on benchmark 10-year Treasury
notes US10YT=RR down to 1.7519% and weighed on the dollar-yen
cross.
The United States and China are trying to finalise the first
phase of a trade agreement before an Asia-Pacific Economic
Cooperation summit in Chile in mid-November.
An exclusive Reuters report that one of the U.S. advisors to
U.S. President Donald Trump on trade talks with China will leave
government could introduce some uncertainty about future trade
talks.