* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Saikat Chatterjee
LONDON, Aug 22 (Reuters) - The Japanese yen rose on Thursday
as risk appetite weakened, with investors looking to U.S.
Federal Reserve Chairman Jerome Powell's speech at Jackson Hole
on Friday.
Minutes of the Fed's July meeting showed policymakers were
divided over whether to cut interest rates but united in wanting
to signal they were set on more cuts. The minutes led investors to lower their expectations of big
rate cuts from the Fed next month, but bond markets still expect
rates to be cut by more than 60 basis points by the end of the
year.
While there was no immediate trigger for the weakness in
risk-oriented currencies such as the Australian and Canadian
dollars, analysts blamed a likely deterioration in overall
business sentiment and a renewed drop in bond yields.
Against the dollar JPY=EBS , the yen advanced by 0.3% to
106.29 yen, nearing last week's eight-month low of 105.05 yen.
The Australian dollar AUD=D3 weakened 0.2% to $0.6768. The
Canadian dollar CAD=D3 slipped 0.1%.
Sentiment was hurt by a drop in the Chinese yuan to a
11-year low against the dollar, indicating trade tension between
the world's two biggest economies remained a major issue.
"Some investors like commodity trading advisors have linked
the downward move in the yuan and Chinese stocks to selling
cross yen," said Yukio Ishizuki, foreign exchange strategist at
Daiwa Securities in Tokyo.
In onshore trading, the yuan CNY=CFXS fell to 7.0752 per
dollar, its weakest since March 2008, before recovering to
7.0732. In offshore trade, the dollar CNH=D3 rose 0.29% to
7.0872 yuan.
Major Chinese state-owned banks were seen supporting the
yuan by receiving dollar/yuan swaps, traders told Reuters.