* Dollar/yen sags after on latest round of trade tensions
* US plans to limit Chinese investments in US tech firms -WSJ
* Lira trims gains after rallying on Turkey president vote win
* Commodity-linked currencies slip as oil rally runs out of steam (Updates throughout)
By Shinichi Saoshiro
TOKYO, June 25 (Reuters) - The dollar fell to a two-week low against the yen on Monday as a latest flare-up in global trade concerns dented investor risk appetites and drove down U.S. yields.
The greenback was down 0.4 percent at 109.54 yen after dropping to 109.45, its weakest since June 11.
Investors steered from risk, with Asian equities in retreat and Treasury yields declining, after the Wall Street Journal reported the U.S. Treasury Department is crafting rules that would block firms with at least 25 percent Chinese ownership from buying U.S. companies involved in “industrially significant technology”.
The report added to the sense of caution felt after U.S. President Donald Trump on Friday threatened to impose a 20 percent tariff on all cars imported from the European Union. The EU responded by saying it will have no choice but to retaliate to such a move.
“The dollar was already looking shaky against the yen in wake of the U.S. spat with the EU. Any positive breakthrough in trade talks would prompt bargain hunting of the dollar, but that is simply not happening,” said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.
“Even if the batch of U.S. data due this week prove to be strong, the dollar may not draw much support as long as trade worries are not cleared.”
This week’s U.S. indicators include housing-related data on Monday, the Conference Board’s consumer confidence index on Tuesday, durable goods orders on Wednesday and personal consumption expenditures (PCE) numbers on Friday.
The dollar index against a basket of six major currencies stood at 94.559 having retreated from 95.529, its highest level since July 2017, scaled early on Friday.
The greenback had climbed to the 11-month peak as higher U.S. yields underlined the divergence in monetary policies between the United States and Europe.
The dollar, however, began to sag towards the end of last week as U.S. yields lost their lift amid heightened trade tensions between Washington and the European Union. The 10-year Treasury note yield fell to a one-week low of 2.871 percent on Monday.
The euro was steady at $1.1654 after gaining about 0.5 percent on Friday. The single currency was lifted after Friday’s upbeat German and French business activity data and fresh assurances by Italian politicians that their nation would not leave the single currency.
“The euro is on a technical bounce but whether it can retain the uptrend depends on how the US-EU trade tensions pan out,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.
“The trade spat has helped drive down both U.S. and German debt yields, and both the euro and dollar could lose out if tensions intensify,” he said. “The yen could end up the winner in such a case by attracting safety bids.”
Commodity-linked currencies dipped as a surge by crude oil prices ran out of steam amid the latest round of trade jitters.
Oil had rallied on Friday after OPEC agreed to an unexpectedly modest increase in production from next month after Saudi Arabia persuaded Iran to cooperate.
The Australian dollar was down 0.3 percent at $0.7418 after gaining 0.85 percent on Friday. The Aussie had fallen to a one-year low of $0.7394 last week, hurt by the Sino-U.S. trade spat.
The Canadian dollar slipped 0.25 percent to C$1.3295 per dollar after advancing 0.4 percent on Friday. The loonie had brushed a one-year low of C$1.3384 last week, buffeted by volatility in crude oil prices.
The Turkish lira was up about 0.5 percent at 4.64 per dollar, after jumping as much as 1.6 percent earlier.
The lira had initially soared after Turkish president Tayyip Erdogan and his ruling AK Party claimed victory in presidential and parliamentary elections on Sunday, overcoming the biggest electoral challenge to their rule in a decade and a half. (Reporting by Shinichi Saoshiro; Editing by Eric Meijer and Richard Borsuk)