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U.S.-China trade deal, tech sector earnings cloud currency

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Tokyo CPI hotter than expected at 2.8%

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Euro nudges higher after ECB holds interest rates

By Gregor Stuart Hunter

SINGAPORE, Oct 31 (Reuters) - The U.S. dollar held its

ground in early Asian trade on Friday after reaching a

three-month high as traders processed mixed signals from this

week's central bank decisions, tech sector earnings and a

tentative U.S.-China tariff truce.

The dollar index, which measures the greenback's

strength against a basket of six currencies, held steady at

99.478 after Wall Street stock market losses spooked global

markets on Thursday.

The U.S. dollar was down 0.1% at 153.935 yen, edging

back from a nearly nine-month high after data on Friday showed

core consumer prices in Tokyo rose at a quicker-than-expected

2.8% in October from a year earlier. This indicated inflation

remains above target in the Japanese capital, complicating the

Bank of Japan's path after it held interest rates on Thursday.

"Risk aversion favours the dollar," said Rodrigo Catril,

currency strategist at National Australia Bank in Sydney.

"The Fed isn't sure whether it will be cutting again," he

added. "And yen weakness coming from what the BOJ is doing isn't

helping."

Elsewhere, Japan's new Finance Minister Satsuki Katayama

said on Thursday she would not stand by remarks she made in

March suggesting the yen's real value is closer to 120-130 per

dollar, citing her current position as minister overseeing

currency policy.

Traders have scaled back bets the Federal Reserve will cut

rates again at its next policy meeting on December 10. Fed funds

futures imply a 74.7% probability of a 25-basis-point cut then

compared with a 91.1% chance a week ago, according to the CME

Group's FedWatch tool.

The yield on the U.S. 10-year Treasury bond was

around a three-week high of 4.0989%, up 0.59 basis point

compared with a previous close of 4.093%.

The euro was 0.1% firmer at $1.1572 after the

European Central Bank kept interest rates unchanged at 2% for

the third meeting in a row on Thursday and repeated that policy

was in a "good place" as economic risks recede.

Against the offshore Chinese yuan, the U.S. dollar

was steady at $7.1089 ahead of the release of China's October

PMI data on Friday.

The Australian dollar was flat at $0.6555, while the

kiwi dollar was also unchanged at $0.574.

Sterling was up 0.1% at $1.316.