* Dollar index firm after Monday's 0.4% gain
* Beijing, Washington say willing to resolve trade dispute
* Fed easing outlook keeps tab on dollar
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Adds yen, yuan fixing)
By Hideyuki Sano and Stanley White
TOKYO, Aug 27 (Reuters) - The yen rose on Tuesday as some
investors tempered their optimism about the chances for a quick
resolution to the U.S.-China trade war, which boosted so-called
risk-off trades.
Global markets have been whipsawed by dramatic twists in the
trade dispute this month. U.S. President Donald Trump on Monday
flagged the possibility of a trade deal with China, days after
both sides announced new tariffs.
The dollar came under additional pressure versus the yen as
a decline in U.S. Treasury yields showed some investors still
favoured the safety of government debt.
The currency market also took some relief from a
stronger-than-expected daily yuan fixing by the People's Bank of
China, which many traders considered an attempt to slow the
yuan's decline versus the dollar. CNY/
While Washington and Beijing have shown a willingness to
return to the negotiating table to resolve their trade row,
there are lingering concerns about a lack of a clear path
towards resolving a dispute that has dragged on for more than a
year and hurt global growth, corporate profits and investments.
"The dollar rallied overnight due to optimism about a trade
deal, but there's a sense that the market has gotten a little
ahead of itself," said Junichi Ishikawa, senior foreign exchange
strategist at IG Securities.
"Some traders can book a little profit here. There are still
so many issues that can trigger a clash between the United
States and China. Treasuries shows the market is still somewhat
sceptical."
The yen JPY=EBS rose around 0.4% in Asian trading to
105.73 per dollar.
The yen, which tends to be bought in times of economic
uncertainty, also rose around 0.4% versus the Australian and New
Zealand dollars.
The dollar index =USD measuring the greenback against a
basket of six major currencies fell 0.06% to 97.960.
Benchmark 10-year U.S. Treasury yields US10YT=RR fell to
1.5232% in Asia. The yield curve was inverted as 2-year yields
traded at 1.5267%, which is commonly considered a sign of an
impending economic recession.
On Monday the greenback rebounded from near eight- month
lows of 104.46 yen after some signs of rapprochement between
Washington and Beijing soothed investors' nerves.
Speaking on the sidelines of the G7 summit of world leaders
in France on Monday, U.S. President Donald Trump said Chinese
officials had contacted U.S. trade counterparts overnight and
offered to return to the negotiating table. Trump's comments sparked a wave of so-called risk-on trades,
which initially boosted the dollar, weakened safe-haven
currencies, and lifted stock markets.
However, some doubts have crept into markets as a Chinese
Foreign Ministry spokesman said he had not heard that a phone
call between the two sides had taken place. The Commerce
Ministry, which typically releases statements on trade calls,
did not respond to a request for comment.
Prior to market opening, the People's Bank of China (PBOC)
lowered its official onshore yuan midpoint CNY=PBOC to 7.0810
per dollar. That was a fresh 11-1/2-year low, but still at a
stronger setting than traders had expected. The onshore yuan had
slipped as much as 0.7% at one point on Monday.
The offshore yuan CNH=D3 opened at 7.1445 per dollar
before trading at 7.1580 as of 0246 GMT. Attempts to slow the
greenback's rise against the yuan also weighed it down versus
the yen, traders said.
"I was quite surprised by the big gains in the dollar/yen
overnight. But it is not clear what the U.S. and China will do
next, and I would expect the dollar to consolidate for the time
being," said Kyosuke Suzuki, director of forex at Societe
Generale.
The euro stood at $1.1105 EUR= , up 0.05% so far in Asia.
Sterling traded at $1.2215 GBP=D4 , after a 0.5% fall on
Monday as investors reassessed whether British Prime Minister
Boris Johnson had made any progress in convincing the European
Union to renegotiate the Brexit agreement.
Johnson said on Monday he was prepared to take Brexit talks
with the European Union down to the very last minute before the
Oct. 31 exit deadline, and if necessary to take a decision to
leave without a deal on that day.