* U.S., Chinese negotiations describe talks in positiveterms
* Yen sold, Aussie and kiwi rally
* Moves slight as caution abounds
By Tom Westbrook
SINGAPORE, Sept 23 (Reuters) - The dollar was supported onMonday, with the market's risk appetite delicately balancedafter talks in Washington between U.S. and Chinese tradedeputies were described as "productive".
The greenback gained against the safe-haven yen, but edgedlower versus trade-exposed currencies, such as the Australianand New Zealand dollars, which rallied on the cautious risk-onmood.
Moves were relatively slight, however, with volumes dampenedby a public holiday in Japan and by the anticipation thatcentral banks on both sides of the Tasman Sea will sound dovishin scheduled remarks this week.
"I think there's still a lot of nervousness around," saidShane Oliver, chief economist at AMP Capital in Sydney, citingMiddle East tensions and the whipsawing fortunes of theU.S-China trade dispute as key drivers.
"These things have a habit of escalating and de-escalatingand then escalating again...it is a bit finely balanced at themoment," he said.
The dollar rose a touch over 0.1% to buy 107.70 Japanese yen. It gave up the roughly same amount of ground to theAustralian and New Zealand dollars, trading at $0.6768 on theAussie and $0.6268 to the kiwi.
Against a basket of currencies the dollar was mostlyflat at 98.500 and it held steady at $1.1017 per euro.
The British pound held at $1.2476 after dropping froma two-month high on Friday when Ireland's foreign minister saidBritain and the European Union were not yet close to a Brexitdeal.
A U.S.-China trade breakthrough had seemed unlikely afterPresident Donald Trump told reporters on Friday he was "notlooking" for a partial deal, and Chinese officials thencancelled goodwill visits to U.S. farmers.
But both sides later published positive statements, with theU.S. Trade Representative's office describing the talks as"productive" and China's Commerce Ministry calling them"constructive." October's high-level talks remain on track.
China's yuan strengthened 0.2% to 7.1025 per dollarin offshore trade, though few are expecting much of a rally orfor the mood to hold should any signs of doubt emerge over abreakthrough in U.S.-China trade negotiations.
"At some point the fundamentals will take over," said MathanSomasundaram, a strategist at brokerage Blue Ocean Equities inSydney. "(The talks) are bringing back a bit of risk-on...but Ithink we will be in a bit of a holding pattern waiting to see."
September manufacturers' surveys in Europe and the UnitedStates due later on Monday are also likely to provide the latestinsight into the state of a world economy hit by slowing globaldemand and the trade war.
The Chicago Fed National Activity Index is also due, whileNew York Fed President John Williams makes a scheduled speechafter the central bank on Friday said it plans more interventionin the U.S. funding market to bolster dollar liquidity.(Editing by Jacqueline Wong)