* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Markets on edge about U.S.-China trade friction
* Safe-haven flows benefit yen and gold
* Political uncertainty surrounds Brexit (Adds New Zealand dollar)
By Stanley White
TOKYO, Aug 9 (Reuters) – The yen traded near an eight month high versus the dollar on Friday as renewed concerns about the U.S.-China trade dispute and signs that central banks are more worried about the global economy boosted safe-haven assets.
The yen, which tends to be bought in times of economic uncertainty, was on course for its second weekly gain versus the greenback and its third weekly gain versus both the Australian and New Zealand dollars.
The pound traded near a two-year low versus the euro after a media report said Prime Minister Boris Johnson is preparing to hold an election after the Oct. 31 deadline for Britain to leave the European Union.
Some investors and economists worry that the U.S.-China trade war has entered a new phase that will do even more damage to the global economy. The increasing pessimism has supported risk-off trades that benefit safe-haven assets like the yen and gold.
“Risk aversion will be with us for a while, and the biggest indication of that is gold shows no signs of peaking out,” said Yukio Ishizuki, foreign exchange strategist at Daiwa Securities in Tokyo.
“In terms of positioning, some speculators are a little too long in the yen, but I think many people feel comfortable remaining short dollar and long yen.”
The dollar was little changed at 105.98 yen, on course for its second weekly decline. On Wednesday, the dollar slumped to 105.50 yen, the lowest since the January flash crash. A break of this level suggests a move to 105.00 yen, analysts said.
The dollar index, which measures the greenback versus a basket of six major currencies, was little changed at 97.548 but on course for its biggest weekly decline since June 21.
The offshore yuan traded at 7.0816 per dollar, little changed in Asian trade.
Spot gold rose 0.3% in Asian trading to $1,500.80 per ounce, near the highest in six years, while S&P e-mini futures traded 0.3% lower.
Earlier in the Asia session, the yen popped higher after Bloomberg News said the White House is delaying a decision on allowing U.S. companies to do business with China’s Huawei Technologies.
The trade war has entered new territory after U.S. President Donald Trump said he will impose more tariffs on Chinese imports from Sept. 1. China let the yuan slide through a key support level on Monday to an 11-year low and hours later the U.S. Treasury Department labelled China a currency manipulator.
The U.S.-China trade war has brought forward the next U.S. recession, according to a majority of economists polled by Reuters who now expect the Federal Reserve to cut rates again in September and once more next year.
The New Zealand dollar was a tad higher on the day at $0.6486 but on course for its third weekly decline. The kiwi has slumped to its lowest in more than three years this week after the central bank on Wednesday stunned traders by cutting interest rates more than expected and hinting at taking rates into negative territory.
Some economists say the Reserve Bank of New Zealand was trying to stay ahead of rate cuts expected from other central banks, which are likely to have a big impact on currency markets in coming months.
Sterling traded at $1.2146, little changed on the day but on course for a fourth consecutive week of declines. The pound earlier fell after the Financial Times reported that Johnson would hold an election in the days following Brexit if lawmakers sunk his government with a vote of no-confidence.
Johnson has said he will take Britain out of the European Union on Oct. 31 even if that means leaving without a transition agreement.
(Reporting by Stanley White; Editing by Kim Coghill and Sam Holmes)