Yen holds gains in Asia

The yen held onto gains on Wednesday as weaker-than-expected Chinese economic data reinforced the view that resolving the trade war was a long way off even if US President Donald Trump had delayed some additional tariffs.
The offshore yuan remained lower against the dollar after China's closely watched industrial output rose in July at the slowest pace in more than 17 years. The onshore yuan rose against the dollar, taking its cue from a stronger fixing.
News the United States would delay some tariffs supported Asian stocks, but optimism in the currency market quickly faded on broader concerns there are no quick solutions to the trade row, which economists say is dragging on China's economy and threatening global growth.
Increasingly violent clashes between protesters and police in Hong Kong, worries about Britain's exit from the European Union, and Middle East tensions mean risk aversion could quickly flare up again and roil major currencies.
"The mid-term trend is for yen gains, because the United States has not changed its tough stance on China," said Shuntaro Ikeshima, chief manager of forex and financial products trading at Mitsubishi UFJ Trust and Banking Co.
"There was a lot of short-covering overnight, but in Asia the market quickly ran into real demand to buy yen. Once you added the Chinese data, this managed to keep the yen firm."
The dollar pared some of its losses but was still down 0.3% at 106.48 yen in Asia.
The Australian dollar fell 0.2% to 72.45 yen, while the pound fell 0.2% to 128.50 yen.
Against the offshore yuan, the dollar rose 0.3% to 7.0331 yuan. However, in the onshore market, the yuan rose to 7.0177 per dollar, stronger than its previous close at 7.0558.
The dollar index, measuring the greenback against a basket of six currencies, was little changed at 97.755 after jumping 0.4% on Tuesday.
The euro was unchanged at $1.1172, but fell 0.2% to 119.07 yen.
European data on consumer prices and GDP is due from Europe later on Wednesday and could shape the near-term direction of the common currency.
Sterling was little changed at $1.2061, but remained within striking distance of $1.2015, the lowest level since January 2017.