* GRAPHIC: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Daniel Leussink
TOKYO, June 11 (Reuters) - The yen eased on Tuesday as
investors' risk appetite ticked up after the United States
shelved plans to impose tariffs on Mexico, though fresh U.S.
trade threats against China tempered overall market sentiment.
Financial markets over the last year have been gripped by
fears of escalating trade tensions between the world's two
largest economies, stoking worries over the outlook for global
growth.
Against the safe-haven yen, the dollar advanced nearly 0.2%
to 108.625 yen JPY= , extending a similar gain during the
previous session.
The dollar index, which measures the greenback against a
basket of six peers, edged up 0.05% to 96.799 .DXY , building
on a 0.2% gain achieved overnight.
U.S. President Donald Trump said on Monday he was ready to
impose another round of tariffs on Chinese imports if he does
not reach a trade deal with China's president at the Group of 20
summit in Osaka, Japan near the end of the month. Since two days of talks to settle the U.S.-China trade
dispute last month in Washington ended in a stalemate, Trump has
repeatedly said he expected to meet Chinese President Xi Jinping
at the G20 gathering. China has not confirmed any such meeting.
"It might not happen if the Chinese side thinks there isn't
any point in having a meeting if the opinions are far apart from
the start," said Yukio Ishizuki, senior currency strategist at
Daiwa Securities.
"Trump has been applying pressure by emphasising there will
surely be a meeting, but it isn't clear what the Chinese side
will do."
Broader market sentiment got a lift from the U.S.-Mexico
trade and migration deal, sending U.S. government bond yields
higher overnight. Futures for the S&P 500 were last up 0.2% ESc1 , recovering
after trading in negative territory early in the session. U.S.
10-year Treasury bond yields hit their highest since May 31
US10YT=RR .
"The avoidance of tariffs on Mexican goods are supporting
risk sentiment," said Masafumi Yamamoto, chief currency
strategist at Mizuho Securities.
Investors were hesitant to take on more risk because of
"uncertainty" about what Trump does in relation to China ahead
of the G20 summit, he said.
In offshore trade, the Chinese yuan was last up 0.2% at
6.9310 yuan per dollar CNH=D4 , reversing an early loss. It was
still hovering not far off a near seven-month low brushed on
Friday.
Elsewhere, the Australian dollar was largely steady at
$0.6961 AUD=D4 , recovering after dipping to a one-week low
earlier in the session.
The euro was little changed at $1.1314 EUR= .
The single currency dipped on Monday after two sources
familiar with the European Central Bank's policy discussions
said on the weekend that a rate cut was firmly in play if the
bloc's economy stagnates again after expanding by 0.4% in the
first quarter. The euro rallied nearly 1.5% last week after the ECB said
rates would stay "at their present levels" until mid-2020
instead of hinting at rate cuts, as some had expected.
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GRAPHIC: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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