FOREX-Yen firms but yuan, Aussie slip as U.S.-China trade war heats up

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Risk aversion drives currencies as trade war intensifies
* China's yuan slips to 4-mth low in onshore and offshore
trade

(Adds details and quotes, updates prices)
By Shinichi Saoshiro
TOKYO, May 13 (Reuters) - The safe-haven yen firmed slightly
and the Chinese yuan and Australian dollar dipped on Monday,
after the latest escalation in the trade war between the United
States and China.
The world's two biggest economies appeared at a deadlock
over trade negotiations on Sunday as Washington demanded
promises of concrete changes to Chinese law and Beijing said it
would not swallow any "bitter fruit" that harmed its interests.
The trade conflict had escalated on Friday, with the United
States raising tariffs on $200 billion worth of Chinese goods.
China has vowed to retaliate but has not given details.
"The conflict between the United States and China over trade
is intensifying and the yen is gaining while the Chinese yuan
and Australian dollar are retreating as a result today," said
Masafumi Yamamoto, chief forex strategist at Mizuho Securities
in Tokyo.
"The overall reaction by currencies has been limited,
however, as there are also factors that support hopes for an
eventual settlement, such as the possibility of the two
countries' presidents meeting at the G20."
U.S. President Donald Trump and his Chinese counterpart Xi
Jinping are likely to meet during a G20 summit in Japan at the
end of June and discuss trade, White House economic adviser
Larry Kudlow said on Sunday. The yuan retreated to four-month lows both in the onshore
and offshore markets. It fell roughly 0.5% to 6.8533 per dollar
in onshore trade CNY= , its lowest since Jan. 8.
The dollar was 0.15% lower at 109.790 yen JPY= , near a
three-month low of 109.470 brushed late last week.
"Dollar/yen's range has definitely shifted lower. But it is
difficult to see the dollar fall back towards its lows probed
against the yen at the start of the year, given how relatively
firm recent U.S. economic data has been," said Koji Fukaya,
director at FPG Securities in Tokyo, referring to the
greenback's brief "flash crash" below 105 yen early in January.
"It will be a matter of trying to spot how the trade
conflict comes to further affect economies, such as that of the
United States."
The Australian dollar shed 0.3% to $0.6976 AUD=D4 . A drop
below $0.6960 would take the currency, already burdened by a
dovish shift by the Reserve Bank of Australia, to its lowest
since early January.
The Aussie is sensitive to shifts in risk sentiment and also
serves as a liquid proxy of trades related to China -
Australia's largest trading partner.
The dollar lost 0.05% to 1.0109 Swiss francs CHF= , a safe
haven along with the yen, after going as low as 1.0098 on
Friday, its weakest in nearly a month.
The euro was little changed at $1.1231 EUR= .
The dollar index against a basket of six major currencies
was flat at 97.318 .DXY .

(Editing by Kim Coghill and Jacqueline Wong)