FOREX-Dollar edges up vs yen as some pre-G20 summit jitters ease

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* USD/JPY rebounds from a 6-month low
* U.S.-China talks at G20 seen having impact on Fed policy
* Oil rally lifts Canadian dollar to near 5-month highs

(Updates throughout)
By Shinichi Saoshiro
TOKYO, June 27 (Reuters) - The dollar edged up to a one-week
high against the safe-haven yen on Thursday, as some of the
jitters ahead of the G20 summit in Japan eased amid hopes for
progress there in resolving the Sino-U.S. trade war.
Hong Kong's South China Morning Post, citing sources, said
that the United States and China have agreed to a tentative
truce in their trade dispute ahead of a meeting between leaders
of the two nations on Saturday on the sidelines of the G20
summit,
The greenback added about 0.3% to 108.13 yen JPY= , its
highest since June 20.
On Wednesday, the U.S. currency already rose significantly
versus the yen, a perceived safe-haven which draws bids in times
of political strife, on comments from U.S. Treasury Secretary
Steven Mnuchin about a trade deal between the United States and
China is "about 90%" complete.
Later, analysts realised Mnuchin's comment on degree of
progress in talks was in the past tense, though the cautious
optimism remained intact. Investors are focusing on whether U.S. President Donald
Trump and Chinese President Xi Jinping, at their Osaka meeting,
can pave the way to resolve a trade dispute between the world's
two biggest economies. "While the market easily swings back and forth on U.S.-China
headlines, the real focus going into the G20 is on low Chinese
economic growth and its impact on the markets," said Makoto
Noji, chief currency and foreign bond strategist at SMBC Nikko
Securities.
"If the U.S.-China relationship show an improvement at the
G20, China likely will no longer be in a hurry to implement
steps to simulate its economy."
The Group of 20 summit was also expected to impact the
policy stance of the Federal Reserve, which opened the door to
possible monetary easing in coming months after last week's
meeting.
The potential implications of the Trump-Xi meeting for U.S.
monetary policy are huge, said Masafumi Yamamoto, chief forex
strategist at Mizuho Securities.
"If the two sides agree not to impose more tariffs, the Fed
would no longer need to cut rates," he said. "On the contrary,
if the talks point to the imposition of more tariffs, that could
nudge hesitant policymakers towards rate cuts."
At the start of this week, the dollar took a hit - it
reached a six-month low of 106.780 yen on Tuesday - on the Fed's
dovish turn.
On Thursday, the dollar index .DXY against a basket of six
major currencies rose 0.15% to 96.374.
The index had retreated to a three-month low of 95.843 at
the start of the week amid the Fed's easing prospects. But it
has managed to regain some traction after comments this week
from central bank officials such as Chair Jerome Powell that
tapered expectations for aggressive rate cuts.
The euro EUR= dipped 0.2% to $1.1351.
The Canadian dollar was on a steady footing as crude oil's
surge supported commodity-linked currencies.
The loonie traded at C$1.3131 per dollar CAD=D4 after
advancing overnight to C$1.3108, its strongest since early
February.
Oil prices surged as U.S. stockpiles of crude and refined
products decreased. O/R
The New Zealand dollar NZD=D4 was near a two-month peak of
$0.6693 scaled on Wednesday, when the currency bounced after the
Reserve Bank of New Zealand refrained from lowering rates.
The Australian dollar AUD=D4 inched up to a 2-1/2-week
high of $0.6999.

(Editing by Sam Holmes and Richard Borsuk)