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CORRECTED-FOREX-Yen falls, yuan gains as U.S.-China trade truce lifts risk appetite

(Corrects title of analyst in ninth paragraph)

* Yen, Swiss franc sag after Trump, Xi agree to resume talks

* Offshore yuan at highest levels since early May

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Shinichi Saoshiro

TOKYO, July 1 (Reuters) - The yuan gained and the safe-haven yen slid against the dollar on Monday as appetite for risk-sensitive currencies improved after the United States and China agreed to restart their troubled trade talks.

The dollar rose 0.25% to 108.190 yen, extending its recovery from near a six-month low of 106.78 set last Tuesday.

After meeting Chinese President Xi Jinping in Japan on Saturday on the sidelines of Group of 20 summit, U.S. President Donald Trump said he would hold back on tariffs and that China will buy more farm products.

Trump also said the U.S. Commerce Department would study over the next few days whether to take Huawei off the list of firms banned from buying components and technology from U.S. companies without government approval.

"Most of the discussions that took place between the United States and China at the G20 had already been anticipated, but the mention of Huawei was a bit of a surprise," said Yukio Ishizuki, senior currency strategist at Daiwa Securities.

"There were more dollar short positions than expected, and these are being covered. But once these shorts are covered, the dollar's advance is likely to slow ahead of the non-farm jobs report."

Economists polled by Reuters expect U.S. non-farm payrolls, which will be released on Friday, to have risen to 160,000 in June from 75,000 in May.

Other key U.S. data due this week include Wednesday's Institute of Supply Management's (ISM) non-manufacturing activity index for June.

"Focus now shifts to U.S. fundamentals with the G20 over," said Koji Fukaya, president at Office Fukaya Consulting.

"Some Fed officials curbed easing views recently and the data will help the market get a clearer picture of whether the Fed stands poised to cut rates this month."

At a June 18-19 policy meeting the Federal Reserve opened the door for possible interest rate cuts later this year. But comments last week from central bank officials, including Chair Jerome Powell, had cooled expectations for aggressive rate cuts.

The Swiss franc, another safe-haven currency, fell 0.4% to 0.9801 franc to the dollar.

Offshore Chinese yuan was up 0.3% at 6.8470 per dollar after brushing 6.8166, its highest level since May 9.

Supported by the greenback's rise against the yen, the dollar index against a basket of six major currencies added 0.25% to 96.352.

Against a broadly stronger dollar, the euro fell 0.15% to $1.1351 and the Australian dollar declined 0.35% to $0.7001 .

The Turkish lira was up 0.7% at 5.7431 per dollar after Turkish President Tayyip Erdogan said over the weekend that the United States did not plan to impose sanctions on Ankara for buying Russian defence systems.

The U.S. Treasury 10-year yield was up about 3.5 basis points at 2.031%, putting some distance between a 2-1/2-year low of 1.974% plumbed on June 20. (Editing by Sam Holmes & Shri Navaratnam)