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FOREX-Dollar climbs vs. yen as reports fuel trade deal hopes

By Saqib Iqbal Ahmed

* China open to partial trade deal -Bloomberg

* Sterling falls after report of EU concession on Brexit is denied (New throughout, updates rates and comments post-U.S. market open; new byline, changes dateline, previous LONDON)

By Saqib Iqbal Ahmed

NEW YORK, Oct 9 (Reuters) - The U.S. dollar rose against the safe-haven Japanese yen on revived hopes for an amicable resolution to the U.S.-Chinese trade war, after a report that China is still open to agreeing to a partial trade deal with the United States.

The report, from Bloomberg, cited an official with direct knowledge of the trade talks.

It comes a day after trade tensions flared again after the U.S. State Department said it has imposed visa restrictions on Chinese government and Communist Party officials it believes responsible for the detention or abuse of Muslim minorities in Xinjiang province.

Separately, the Financial Times newspaper reported that Chinese officials are offering to increase annual purchases of U.S. agricultural products as the two countries seek to resolve their trade dispute.

Vice Premier Liu He, China's top trade negotiator, is scheduled to travel to Washington for their next round of trade talks on Oct 10-11.

"Although President Trump has expressed little interest in a partial agreement like the one that was struck with Japan, China seems to be more sympathetic," Marc Chandler, chief market strategist at Bannockburn Global Forex, said in a note.

Against the yen, which tends to strengthen during times of geopolitical stress due to Japan's standing as the world's biggest creditor, the greenback was 0.29% higher at 107.38 yen.

Currencies linked with greater investor risk appetite, such as the Australian dollar, crept higher. The Aussie was up 0.13%, while the New Zealand dollar rose 0.24%.

Still, some analysts advocated caution about the latest bout of optimism around the U.S.-China trade talks.

"The Trump administration’s decision to impose visa bans on Chinese officials linked to abuses, blacklist some Chinese high tech companies and a ban on U.S. pension funds investing in China hardly make for a positive backdrop to the trade talks, especially considering that China has yet to respond to the U.S. moves," said Shaun Osborne, chief market strategist at Scotiabank in Toronto.

The dollar index, which measures the greenback against a basket of other currencies, was 0.06% lower on the day as traders awaited the release of the U.S. Federal Open Market Committee's minutes from its September meeting, due later on Wednesday.

Meanwhile, sterling erased earlier gains on Wednesday after the Northern Irish party that supports the British government said it would emphatically oppose a reported European Union concession on the Irish backstop under any Brexit deal.

The pound was 0.02% lower against the dollar at $1.2215, after rising as high as $1.229.

(Reporting by Saqib Iqbal Ahmed; Editing by Steve Orlofsky)