FOREX-Yen clings onto gains as U.S.-China trade row supports safe-havens

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Markets on edge about U.S.-China trade friction
* Safe-haven flows benefit yen and gold
* Political uncertainty surrounds Brexit

(Adds New Zealand dollar)
By Stanley White
TOKYO, Aug 9 (Reuters) - The yen traded near an eight month
high versus the dollar on Friday as renewed concerns about the
U.S.-China trade dispute and signs that central banks are more
worried about the global economy boosted safe-haven assets.
The yen, which tends to be bought in times of economic
uncertainty, was on course for its second weekly gain versus the
greenback and its third weekly gain versus both the Australian
and New Zealand dollars.
The pound traded near a two-year low versus the euro after a
media report said Prime Minister Boris Johnson is preparing to
hold an election after the Oct. 31 deadline for Britain to leave
the European Union.
Some investors and economists worry that the U.S.-China
trade war has entered a new phase that will do even more damage
to the global economy. The increasing pessimism has supported
risk-off trades that benefit safe-haven assets like the yen and
gold.
"Risk aversion will be with us for a while, and the biggest
indication of that is gold shows no signs of peaking out," said
Yukio Ishizuki, foreign exchange strategist at Daiwa Securities
in Tokyo.
"In terms of positioning, some speculators are a little too
long in the yen, but I think many people feel comfortable
remaining short dollar and long yen."
The dollar was little changed at 105.98 yen JPY=EBS , on
course for its second weekly decline. On Wednesday, the dollar
slumped to 105.50 yen, the lowest since the January flash crash.
A break of this level suggests a move to 105.00 yen, analysts
said.
The dollar index =USD , which measures the greenback versus
a basket of six major currencies, was little changed at 97.548
but on course for its biggest weekly decline since June 21.
The offshore yuan traded at 7.0816 per dollar CNH= , little
changed in Asian trade.
Spot gold rose 0.3% in Asian trading to $1,500.80 per ounce,
near the highest in six years, while S&P e-mini futures ESc1
traded 0.3% lower.
Earlier in the Asia session, the yen popped higher after
Bloomberg News said the White House is delaying a decision on
allowing U.S. companies to do business with China's Huawei
Technologies.
The trade war has entered new territory after U.S. President
Donald Trump said he will impose more tariffs on Chinese imports
from Sept. 1. China let the yuan slide through a key support
level on Monday to an 11-year low and hours later the U.S.
Treasury Department labelled China a currency manipulator.
The U.S.-China trade war has brought forward the next U.S.
recession, according to a majority of economists polled by
Reuters who now expect the Federal Reserve to cut rates again in
September and once more next year. The New Zealand dollar was a tad higher on the day at
$0.6486 but on course for its third weekly decline. The kiwi has
slumped to its lowest in more than three years this week after
the central bank on Wednesday stunned traders by cutting
interest rates more than expected and hinting at taking rates
into negative territory.
Some economists say the Reserve Bank of New Zealand was
trying to stay ahead of rate cuts expected from other central
banks, which are likely to have a big impact on currency markets
in coming months.
Sterling traded at $1.2146 GBP=D3 , little changed on the
day but on course for a fourth consecutive week of declines. The
pound earlier fell after the Financial Times reported that
Johnson would hold an election in the days following Brexit if
lawmakers sunk his government with a vote of no-confidence.
Johnson has said he will take Britain out of the European
Union on Oct. 31 even if that means leaving without a transition
agreement.