FOREX-US tariffs raise demand for safe-haven yen; pound recovers

* Yen at one-month high vs dollar, two-year high vs sterling
* Euro unchanged vs dollar before U.S. jobs report
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Olga Cotaga
LONDON, Aug 2 (Reuters) - A U.S. threat to impose new
tariffs on Chinese imports pushed the safe-haven Japanese yen to
a five-week high against the dollar and a two-and-a-half-year
high against the pound.
U.S. President Donald Trump said a 10% tariff would be
imposed on $300 billion worth of Chinese goods on Sept. 1, after
U.S. negotiators returned from trade talks in Shanghai and
reported no progress. Trump claimed China had failed to live up
to promises made in previous talks The yen was up 0.4% to 106.95 against the dollar JPY=EBS .
It had jumped to 106.86 in Asian trading, its strongest since
June 25. It was last up 0.6% at 129.61 GBPJPY=D3 against the
pound after gaining to 129.41 earlier, its strongest since
November 2016.
"There was a speculative move to test the dollar/yen's
downside, but it ran into a lot of real-demand bids," said Yukio
Ishizuki, foreign exchange strategist at Daiwa Securities in
Tokyo.
"Yen buying still has further room to run, especially
against the crosses. Trump has given us plenty of reason to move
to risk-off trades. The trade war will be in focus for some time
to come."
The battered pound recovered some losses on Friday, but it
was not far from the 30-month low it reached on Thursday. It was
last trading unchanged at $1.2123 GBP=D3 and at 91.48 pence
against the euro EURGBP=D3 .
Most market participants remain wary of sterling, worried
that the chances of a disorderly Brexit grew after Boris Johnson
took over as prime minister last month.
Traders will be watching UK construction purchasing
managers' survey due at 0830 GMT. According to economists polled
by Reuters, the PMI is expected to rise to 46 in July from 43.1
in June, though still remaining in the contraction territory.
The euro was unchanged at $1.1091, not far from the 26-month
low it hit the previous day EUR=EBS .
Non-farm payrolls are due in the United States later in the
day. Economists a decrease in the number of jobs added to the
economy, to 164,000 in July from 224,000 in June.
Responses to the jobs report are "skewed toward a bigger
move to a weak report, given it would reinforce the increased
global risk concerns," said Derek Halpenny, currency strategist
at MUFG after the escalation in the U.S.-China trade war.
Elsewhere, the Swiss franc reached a two-year high of 1.0949
against the euro.