South Korea will scrap an intelligence-sharing pact with Japan amid an intensifying dispute over history and trade, South Korea's presidential office said on Thursday.Asia Politicsread more
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Markets on edge about U.S.-China trade friction
* Safe-haven flows benefit yen and gold
* Political uncertainty surrounds Brexit
TOKYO, Aug 9 (Reuters) - The yen rose on Friday on renewed concerns about the U.S.-China trade dispute after a report that the White House is delaying a decision on allowing U.S. companies to do business with China's Huawei Technologies.
The Bloomberg report on Huawei, a telecoms equipment maker that Washington has accused of espionage and stealing intellectual property, sparked a flurry of risk-off trades which also pushed up gold prices and sent U.S. stock futures lower.
The offshore yuan was stable versus the dollar in early trade after an alarming early week slide, but it will be closely watched as traders eye Beijing's response to escalating trade tensions.
The pound traded near a two-year low versus the euro after a media report said new Prime Minister Boris Johnson is preparing to hold an election after the Oct. 31 deadline for Britain to leave the European Union.
Increased uncertainty about the standoff between the United States and China, as well as uncertainty about Brexit, is likely to continue to support safe-haven currencies and risk-off trades in coming weeks.
"The news about Huawei triggered the rise in the yen," said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo.
"U.S. stocks are trying to stage a recovery, but this is a reminder that the U.S.-China trade dispute remains a risk, and this risk is not receding. In this environment, it is easy for the yen and gold to go higher."
The dollar fell 0.2% to 105.84 yen, on course for its second weekly decline. If the dollar manages to break its Aug. 7 low of 105.50 yen, it would next target 105.00 yen, Ishikawa said.
Yen traders were largely unfazed by data showing Japan's economy grew much more than expected in April-June, as robust private consumption and business investment offset the hit to exports from cooling global demand.
The data offers some relief for the Bank of Japan, which is under pressure to follow other central banks and ramp up stimulus to head off heightening global risks.
The dollar index, which measures the greenback versus a basket of six major currencies, was little changed at 97.566.
The offshore yuan traded at 7.0816 per dollar, little changed in Asian trade.
Spot gold rose 0.3% in Asian trading to $1,500.80 per ounce, near the highest in six years, while S&P e-mini futures traded 0.5% lower.
The White House delayed its decision on Huawei after China said it would halt purchases of U.S. agricultural products, Bloomberg reported, highlighting the tit-for-tat nature of the trade dispute between the world's two-largest economies.
The trade war has entered new territory after U.S. President Donald Trump said he will impose more tariffs on Chinese imports from Sept. 1. China let the yuan slide through a key support level on Monday to an 11-year low and hours later the U.S. Treasury Department labelled China a currency manipulator.
There are growing concerns the rapid deterioration in U.S.-China relations will place additional strain on an already fragile global economy.
Sterling traded at $1.2145, little changed on the day but on course for a fourth consecutive week of declines.
Against the euro, Sterling was quoted at 92.10 pence , near a two-year low of 92.65 pence.
The Financial Times, citing unidentified senior aides to the prime minister, reported that Johnson would hold an election in the days following Brexit if lawmakers sunk his government with a vote of no-confidence.
Johnson has said he will take Britain out of the European Union on Oct. 31 even if that means leaving without a transition agreement. (Reporting by Stanley White; Editing by Kim Coghill)