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FOREX-Yen, Swiss franc gain as Trump-Kim summit cut short

* Trump, Kim fail to meet agreement, meeting cut short

* Below-par factory activity from China, Japan add to gloom

* Sterling scales $1.33 overnight on Brexit delay bets

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

By Daniel Leussink

TOKYO, Feb 28 (Reuters) - The safe-haven Swiss franc and the yen gained slightly on Thursday after the United States and North Korea failed to reach an agreement on denuclearisation of the Korean peninsula after two days of meetings.

Risk currencies were also hampered by uncertainty over the progress in U.S.-China trade talks.

The Swiss franc rose 0.3 percent against the dollar and the euro to 0.9979 per dollar and 1.1350 per euro.

The Japanese yen gained 0.2 percent against the dollar to 110.78.

U.S. President Donald Trump said on Thursday his summit with North Korean leader Kim Jong Un did not reach an agreement due to North Korean demands to lift punishing U.S.-led sanctions. The news triggered knee-jerk, flight-to-quality bids in safe assets.

Optimism on the global economy was also dented after monthly gauges of factory activity in both China and Japan came in weaker than expected on Thursday, offering fresh evidence that the seven-month U.S.-Sino trade dispute was taking a toll on economic growth around the world.

Also undermining the mood, U.S. Trade Representative Robert Lighthizer told a Congressional hearing on Wednesday it was too early to predict an outcome in U.S.-China trade negotiations.

Against this backdrop, the dollar was generally supported against riskier currencies.

The euro stood little changed at $1.1381 while the Australian dollar dipped 0.1 percent to $0.7135.

"Investors are probably putting on the safe trade, which is being long dollars. On one hand, it's not very exciting but on the other hand, investors do need to produce yield," said Bart Wakabayashi, Tokyo branch manager at State Street Bank.

"It's probably not performing the way that they need it to do," he said. "We've probably seen some interest in emerging markets selectively (to get yield)."

Sterling held onto gains after rallying to its highest levels in seven months on Wednesday as traders ramped up bets that a no-deal Brexit was less likely and that Britain's departure from the European Union would be delayed.

British Prime Minister Theresa May on Tuesday had offered lawmakers the chance to vote in two weeks for a no-deal Brexit or to delay Britain's exit from the E.U. if her attempt to ratify an agreement fails.

"The push and pull factors for sterling seem set for the short term in that delays and soft Brexit options will lead to strength, with a hard-deal Brexit leading to significant pull backs," noted Nick Twidale, chief operating officer at Rakuten Securities Australia in Sydney.

"The E.U. is pushing for a lengthy delay," Twidale said in a note. "This probably reflects the fact that the economic data out of Europe has been very poor in recent months and political tensions are rising in member states."

The pound last stood at $1.3295, down 0.1 percent on the day. It had climbed as high as $1.3351 overnight, ending the session almost half a percent higher and moving further above its 200-day moving average.

Sterling has risen about 1.5 percent against the dollar so far this month, adding to a 2.8-percent gain booked in January. (Editing by Sam Holmes and Jacqueline Wong)