* Argentina selloff, Hong Kong protests rattle markets
* Analysts predict more yen strength in months ahead
* Euro weakens, German inflation data as expected
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Tommy Wilkes
LONDON, Aug 13 (Reuters) – The Japanese yen remained near seven-month highs on Tuesday and the U.S. dollar rallied, as investors unnerved by the Sino-U.S. trade war, protests in Hong Kong and a crash in Argentina’s peso currency sought safety.
Investors have flocked to the yen amid an escalating trade war between China and the United States and worries about a global economic slowdown. The Japanese currency, along with the dollar and Swiss franc, is a safe haven in times of uncertainty.
The yen got a fresh boost from growing unrest in Hong Kong and surprise election results in Argentina that led to a rout in the country’s currency, the peso, and stocks and bonds.
ING analysts said the yen was benefiting “from the best of both worlds”, pointing to general risk aversion and a rush to price in more interest rate cuts by the Federal Reserve. They think the yen will rally to 102 or 103 per dollar later this year.
U.S. Treasury yields have declined steadily recently, and the spread between U.S. and Japanese benchmark 10-year yields has shrunk to its narrowest since November 2016.
The yen was unchanged by 0720 GMT at 105.32 per dollar. It reached 105.05 on Monday, a seven-month high and, excluding the January flash crash, its strongest since early 2018.
The dollar rose 0.2% against a basket of other currencies, its index reaching 97.563.
The euro weakened 0.2% to $1.1196. German inflation data in line with forecasts did little to support it.
The offshore Chinese yuan <CNH=EBS was little changed at 7.104 after the People’s Bank of China set a midpoint rate at an 11-year low that was still stronger than expected.
A senior official at the People’s Bank of China told Reuters on Tuesday that the yuan was at an appropriate level .
Argentina’s peso lost roughly 15% to 52.15 per dollar on Monday after brushing a record low of 61.99.
Fears of a possible return to interventionist policies, and by extension a possible debt default, gripped the market after conservative Argentina President Mauricio Macri lost in presidential primaries by a margin much wider than expected .
Commerzbank strategist Antje Praefcke said that the reaction elsewhere to the Argentine primary result was a “sign of just how jittery markets are”.
Sterling slipped 0.2% to $1.2052, near the $1.2015 it touched on Monday, its lowest in more than two years, as fears of a no-deal Brexit dominated trading. (Additional reporting by Shinichi Saoshiro in Tokyo, editing by Larry King)