* Japanese importer demand limits dollar's downside
* US, Chinese leaders to discuss Pyongyang's arms
* U.S. economy, Trump's policy agenda remain in focus
* Euro nurses losses after plumbing three-week lows
TOKYO, April 5 The dollar lost its grip on
earlier gains against the yen on Wednesday, remaining under
pressure after North Korea fired a ballistic missile into the
sea ahead of a summit between U.S. and Chinese leaders.
Pyongyang's test-fire came just a day before U.S. President
Donald Trump and his Chinese counterpart Xi Jinping meet for
talks on economic and security issues, and will include
persuading North Korea to curb its arms development.
Though the perceived safe-haven Japanese currency tends to
gain in times of geopolitical tension or risk aversion, the
dollar got some help from Japanese importers on a "gotobi" date
- the fifth day of the month and dates that are multiple of
five- on which accounts are traditionally settled.
"Today, there is real demand for the dollar, on 'gotobi,' so
its downside should be limited," said Kaneo Ogino, director at
foreign exchange research firm Global-info Co in Tokyo.
But the concerns about the upcoming China-U.S. summit
undermined the greenback, which is also under pressure from
rising speculation that Trump will face challenges implementing
his promised growth-boosting policies in the wake of his
administration's failure to pass healthcare reform.
"People want to wait and see how Trump can carry out his
promises when it comes to infrastructure" and tax reform, Ogino
The dollar edged down 0.1 percent to 110.64 yen, off
from a session high of 110.92 and well below last Friday's
10-day peak of 112.19 yen.
The dollar index, which tracks the U.S. currency against a
trade-weighted basket of six peers, was slightly down on the day
at 100.52, as slumping U.S. Treasury yields also gave
investors little incentive to buy the greenback.
The benchmark U.S. Treasury yield touched its lowest levels
since February in overnight trade. It last stood at 2.349
percent in Asian trading, not far from its U.S.
close of 2.350 percent. It had been trading at levels above 2.40
percent as recently as Monday.
Yields edged down as investors sought safety, even as
investors expect more interest rate increases by the Federal
Reserve this year. Solid U.S. data on Tuesday reinforced those
expectations, showing the country's trade deficit fell more
than expected in February, while separate figures showed factory
orders rose for the third straight month.
Last week, Trump ordered a probe of the causes of U.S. trade
deficits and tough measures for countries that evaded import
"The foreign exchange market's main focus remains whether or
not Trump can carry out his policies, and whether the U.S.
economy will stay strong enough for the Fed to stick to the path
of rate hikes," said Kumiko Ishikawa, FX market analyst at Sony
"Therefore, this week's U.S. jobs figures are still very
important," she said.
Economists polled by Reuters predict the U.S. economy will
have added 180,000 jobs in March.
The euro, meanwhile, edged up slightly to $1.0674
after plumbing a three-week low of $1.0636 on Tuesday.
The Australian dollar also crept higher to $0.7564,
pulling away from a three-week low of $0.7545 hit in the
previous session when investors pared bets that the Reserve Bank
of Australia would hike rates this year.
Australia's central bank held rates steady for an eighth
month on Tuesday as widely expected, but expressed concerns over
soaring property prices and weak employment conditions.
(Reporting by Tokyo markets team; Editing by Eric Meijer & Shri