* U.S., Chinese negotiators describe talks in positive terms
* Yen sold, Aussie and kiwi rally
* Moves slight as caution abounds
By Tom Westbrook
SINGAPORE, Sept 23 (Reuters) - The safe-haven Japanese yen
fell against most major currencies on Monday, with investors'
appetite for riskier assets improving after talks in Washington
between U.S. and Chinese trade deputies were described as
"productive".
The currency was sold in favour of the euro and greenback,
but trade-exposed currencies, such as the Australian and New
Zealand dollars rose further, with the Aussie heading toward its
best day against the yen in two weeks with a 0.4% gain.
However, volumes were dampened by a public holiday in Japan
and by the anticipation that central banks on both sides of the
Tasman Sea will sound dovish in scheduled remarks this week.
Investors are also looking to September flash manufacturers
surveys in Europe and the United States, due later on Monday,
for the latest insight into the health of the global economy,
with weak readings a risk to delicate global sentiment.
"We've got a couple of headlines insisting that the trade
talks are on track," said Westpac currency strategist Sean
Callow in Sydney. "That's helped a little bit," he said, though
adding that global risk appetite remained fragile.
"Having gone into the weekend in a fairly nervous and
risk-off fashion, weekend news has provided a little bit of
comfort and helped the Aussie to recover a small amount of lost
ground."
The yen drifted 0.15% lower against the dollar to 107.72
JPY= , and weakened 0.2% against the euro to 118.71 EURJPY= .
The Australian and New Zealand dollars each rallied, though
not enough to recoup Friday's losses that pushed both currencies
to multi-week lows. The Australian dollar AUD=D3 rose 0.2% to
$0.6776 and the kiwi NZD=D3 climbed almost 0.3% to $0.6271.
Against a basket of currencies .DXY the dollar was mostly
flat around 98.500 and it held steady at $1.1020 per euro
EUR= .
China's yuan CNH= climbed as high as 7.0967 per dollar in
offshore trade, before retracing most of its gains to hit 7.1114
by mid-session in Asia as fears of a gloomier outcome to the
trade talks crept back in and Chinese stocks fell.
"I think there's still a lot of nervousness around," said
Shane Oliver, chief economist at AMP Capital in Sydney, citing
Middle East tensions and the whipsawing fortunes of the
U.S-China trade dispute as key drivers.
"These things have a habit of escalating and de-escalating
and then escalating again...it is a bit finely balanced at the
moment," he said.
A U.S.-China trade breakthrough had seemed unlikely after
President Donald Trump told reporters on Friday he was "not
looking" for a partial deal, and Chinese officials then
cancelled goodwill visits to U.S. farmers. But both sides later published positive statements, with the
U.S. Trade Representative's office describing the talks as
"productive" and China's Commerce Ministry calling them
"constructive." October's high-level talks remain on track.
The British pound GBP= was flat at $1.2470, after toppling
on Friday from a two-month high as hopes for a Brexit deal
soured. On Monday, British Prime Minister Boris Johnson also
cautioned against the likelihood of a breakthrough. But the Sun newspaper reported, citing a senior government
source, that Johnson and U.S. President Donald Trump have agreed
to strike a UK-U.S. trade deal by July next year. Chicago Fed National Activity Index is also due on
Monday, while New York Fed President John Williams makes a
scheduled speech after the central bank on Friday said it plans
more intervention in the U.S. funding market to bolster dollar
liquidity. (Editing by Jacqueline Wong)