* China narrowing scope for trade deal - Bloomberg
* Dollar loses momentum despite Friday’s upbeat jobs data
* Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh
By Hideyuki Sano
TOKYO, Oct 7 (Reuters) - The yen gained slightly and the yuan slipped a tad in early Asian trade on Monday on a media report that China wants the scope of this week’s trade talks and any deal with the United States to be narrow.
Bloomberg reported that Chinese officials are signalling they are increasingly reluctant to agree to a broad trade deal pursued by U.S. President Donald Trump.
That report knocked down the dollar against the yen during thin early Monday trade to as low as 106.55 yen.
The U.S. currency has so far found some support around a one-month low of 106.48 touched last week.
It last traded at 106.82 yen, down 0.11% from late Friday U.S. levels.
The yuan weakened about 0.20% in offshore trade to 7.1285 yuan per dollar. There was no onshore trading as Monday is the last day of China’s holiday break for its national day.
Yukio Ishizuki, senior strategist at Daiwa Securities, said he believes the impact of the media story “will not last long, with U.S.-China trade talks due later this week, ahead of a planned tariff hike on Oct. 15.”
Top-level U.S.-China trade talks are scheduled to resume Thursday and Friday, when Chinese Vice Premier Liu He meets U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in Washington.
Trump last month delayed hiking levies on $250 billion worth of Chinese imports to 30% from current 25% to Oct 15. from originally scheduled Oct. 1 “as a gesture of good will”.
“The United States probably does not want to raise tariffs given recent signs of softening in the U.S. economy, and markets hope for some sort of deal that allows them to keep talking in the future,” Ishizuki said.
Last week saw a string of soft U.S. economic data that raised doubts on the assumption by many that the U.S. economy will be more resilient than other economies to damage from Sino-U.S. trade war.
Such worries eased slightly after U.S. September non-farm payrolls data on Friday came in fairly strong and the jobless rate fell to near a 50-year low.
But that did little to change market expectations that the Fed will cut likely interest rates at its next policy review on Oct. 29-30 to support the economy.
Sentiment about the dollar is further complicated by the uncertain U.S. political outlook, as Trump faces an impeachment inquiry in the U.S. House of Representatives.
As the dollar has lost momentum, the euro stood at $1.0982 , up 0.02% in Asia, recovering little by little after having hit a near 2 1/2-year low of $1.0879 last Tuesday.
Sterling traded little changed at $1.2336, with uncertainties on Brexit keeping many investors on the sideline.
Britain’s Brexit minister said the UK is open to some flexibility on the proposed mechanism that would allow lawmakers in post-Brexit Northern Ireland to decide whether the British province remains in regulatory alignment with the European Union.
With less than a month until the U.K.’s scheduled exit on Oct 31, British Prime Minister Boris Johnson is seeking significant changes to how the most contentious issue - the border between British-ruled Northern Ireland and EU member Ireland - was dealt with in the divorce deal agreed by his predecessor, Theresa May, almost a year ago.
The European Union and Ireland said last week that the proposals were unlikely to yield a deal. (Reporting by Hideyuki Sano; Editing by Richard Borsuk)