* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Yen, bonds and gold edge higher
* Gloom descends on FX market
* Markets on edge over trade war, Brexit
By Stanley White and Tom Westbrook
TOKYO/SINGAPORE, Aug 29 (Reuters) - A risk-off mood
bolstered the safe-haven yen on Thursday, with record lows on
U.S 30-year Treasury yields holding back the dollar as investors
turned bleak on the prospect of a trade-war breakthrough any
time soon.
The yen firmed 0.3% by lunchtime in Asian trade to as high
as 105.91 per dollar JPY= , after the cautious optimism seen in
currency markets in the morning gave way to gloom.
The Japanese currency also gained against the Australian
dollar AUD=D3 and New Zealand dollar NZD=D3 , which hit a
four-year low as business sentiment weakened.
The sterling was flat, nursing losses incurred on Wednesday
when fears of a no-deal Brexit surged in response to British
Prime Minister Boris Johnson's move to suspend parliament in a
bid to limit debate ahead of the Oct. 31 Brexit deadline.
"It's very difficult to take on any kind of major risk in
this environment," said Chris Weston, head of research at forex
brokerage Pepperstone Group, pointing to the inverted yield
curve as an indicator of sentiment.
"We've got a pretty clear idea of what our two big circuit
breakers are - those being a genuine feel towards the Xi-Trump
relations and the other one is the Fed getting ahead of the
curve," he said on the phone from Melbourne.
"We just don't think any of those are going to be triggered
any time soon...we've just been advocating just staying in those
core, defensive FX positions for the moment."
China's onshore spot yuan CNY=CFXS eased slightly, to be
weaker for an 11th straight session, although a
firmer-than-expected central bank fixing helped stem deeper
losses. Against a basket of currencies .DXY the dollar was
steady around 98.190.
Dominating investor concerns is the inverted U.S. Treasury
yield curve, in which long-dated yields are lower that
short-dated ones, commonly considered a sign of future
recession.
Sentiment in the currency market is also likely to be
weighed by the Sino-U.S. trade dispute, which remains far from
unresolved.
The latest round of tit-for-tat trade-war tariff hikes takes
effect on Sunday, with Washington set to levy an extra 5% tariff
- announced by President Donald Trump on Twitter last week - on
$300 billion in Chinese imports.
Retailers across the U.S. warned on Wednesday of price hikes
and braced for job losses as a result, while on Thursday Korea
outlined its most aggressive spending plan in a decade to
buttress its weakening economy. Yields on 30-year Treasuries US30YT=RR and 10-year German
bunds DE10YT=TWEB both hit a record low as investors scrambled
for the safety of government debt.
"The biggest market impact of these new threats is the
uncertainty," Hannah Anderson, Global Market Strategist at J.P.
Morgan Asset Management said by email.
"This uncertainty is having the most damaging effect on
markets; it constrains investment, slows growth, elevates
volatility, and darkens the outlook for investors of all
stripes."
The latest gloomy omen came from New Zealand, where ANZ
Bank's closely-watched survey of business sentiment showed
deepening weakness in both activity and confidence. That
suggests aggressive cuts in interest rates are yet to gain any
traction.
The kiwi NZD=D3 was off 0.3% at $0.6318, after touching
its lowest since September 2015 at $0.6311. The pound held steady at $1.2202 GBP=D3 on Thursday and
was last quoted at 90.82 pence per euro EURGBP=D3 .
The Chinese yuan was close to lows not seen since the global
financial crisis, trading onshore CNY= at 7.1663 per dollar
and offshore CNH= a little weaker at 7.1728 per dollar at 0400
GMT. The yen hit a session high of 105.91 by 0402 GMT. Spot gold
XAU= rose 0.2% to $1,542.00 per ounce, after hitting a
six-year high on Monday.
The yen and gold are both considered safe-haven assets.