FOREX-Yen gains, yuan falls as Hong Kong tensions muddy trade progress

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Worries about U.S.-China relations boost safe havens
* Hong Kong human rights bill could hamper trade war
* U.S. economic data to limit dollar's downside

By Stanley White
TOKYO, Nov 28 (Reuters) - The safe-haven yen rose against
the dollar after U.S. President Donald Trump signed into law
support for anti-government protesters in Hong Kong, which could
complicate efforts to end the U.S.-China trade war.
That caused the yuan to fall in offshore trade on mounting
worries that months of often violent protest against Chinese
rule of the former British colony potentially will worsen
already fractious relations between Washington and Beijing.
The Swiss franc and gold also rose on Thursday as investors
sought other safe harbours due to concerns about a potential
increase in geopolitical risk.
In response to the U.S. move, China's foreign ministry said
it resolutely opposed the law and threatened to take firm
counter-measures, complicating efforts to scale back a 16-month
long trade war between the world's two-largest economies.
"The yen is being bought because of the news about Trump
signing the Hong Kong bill," said Yukio Ishizuki, foreign
exchange strategist at Daiwa Securities in Tokyo.
"Algorithmic trading could push the yen up further, but the
dollar's losses will be limited because we've had positive U.S.
economic data, which has lifted sentiment."
The yen JPY=EBS rose around 0.2% to 109.39 versus the
dollar on Thursday in Asia, rebounding from a six-month low
reached Wednesday after U.S. economic growth was revised up in
the third quarter. In the offshore market, the yuan CNH=D3 fell 0.16% to
7.0255 per dollar. In the onshore market, the yuan CNY=CFXS
was little changed at 7.0287 versus the greenback.
China's foreign ministry also said on Thursday that U.S.
attempts to interfere in Hong Kong are "doomed to fail."
The U.S. bill signed on Wednesday requires the State
Department to certify, at least annually, that Hong Kong retains
enough autonomy to justify favourable U.S. trading terms, which
have helped it maintain its position as a global financial hub.
The law also threatens sanctions for human rights violations
in Hong Kong, which has been rocked by months of civil unrest in
response to what protesters say is an erosion of freedoms since
reverting to Chinese rule in 1997. Beijing has denied any undue influence and has blamed
foreign governments for meddling it Hong Kong's affairs.
Many see the U.S. legislation as symbolic, but it has the
potential, if implemented, to further rock relations between the
United States and China.
Washington's rebuke also comes as U.S. and Chinese
negotiators are trying to reach an agreement to de-escalate a
trade war, which would remove a huge headwind from the global
economic outlook.
The United States and China have imposed tariffs on each
other's goods in a prolonged dispute over Chinese trade
practices that the U.S. government says is unfair.
Investor uncertainty benefited the Swiss franc CHF=EBS ,
which pulled back from a two-month low to trade at 0.99875
against the greenback.
Gold XAU= , another safe haven bought in times of
uncertainty, rose 0.22% to $1,457.36 per ounce.
The rise in safe havens undermined the dollar, which came
into Asian trade on a high after revised data showed U.S.
economic growth picked up slightly in the third quarter.
Separate data showed new orders for key U.S.-made capital
goods increased by the most in nine months in October and
shipments rebounded.