* Sterling hits near 4-wk high on report of Brexit deadline delay
* Yen rises 0.25 pct vs dollar, U.S. equity futures dip
* Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh
By Daniel Leussink
TOKYO, Feb 26 (Reuters) - The pound jumped to a near four-week peak against the dollar on Tuesday on reports of a delayed Brexit deadline, and the safe-haven yen moved off the weakest seen this year as a drop in U.S. equity futures checked investors’ risk appetite.
Sterling spiked to its highest against the U.S. currency since late January after Bloomberg News reported that British Prime Minister Theresa May was considering delaying the March 29 deadline for U.K.’s exit from the European Union.
The pound was last up 0.4 percent on the day at $1.3143 , sitting just below a session high of $1.3149, its highest since Jan. 31.
“Delaying Brexit for a few months, which the E.U. is not united on, just kicks the can down the road,” said Michael Every, Hong Kong-based senior Asia-Pacific strategist at Rabobank, in a note.
“Indeed, one could argue that by delaying to May, for example, the odds of ‘hard Brexit’ rise further as at that point any further delay would mean the UK would have to stay in without any E.U. Parliamentary representation - which clearly cannot work,” he said.
The Sun newspaper reported May will propose formally ruling out a “no-deal” Brexit scenario which could potentially lead to the delaying of UK’s exit from the E.U. by months.
The dollar index, which measure the greenback versus a basket of its major rivals, was 0.1 percent lower at 96.329 . Traders are eyeing a slate of data due in the second half of the week for fresh cues on the health of the global economy, including manufacturing activity figures from China and the United States and revised U.S. fourth quarter gross domestic product figures.
Investors are also looking to the Federal Reserve’s latest view on the economy and monetary policy. Fed Chairman Jerome Powell will testify before the Senate Banking Committee later on Tuesday, in the first of a two-day appearance before lawmakers.
Powell and other Fed policymakers have indicated they favour patience before raising key lending rates again due to recent signs of slowing economic growth. The futures market implied traders bet the central bank would not raise interest rates at all in 2019.
The yen rose a quarter of percent to 110.80 per dollar as investors sought the perceived safety of the Japanese unit after U.S. S&P 500 equity futures slipped in Asian trading.
The Japanese currency - traditionally a preferred currency in times of market stress and volatility - had fallen as low as 111.24 yen per dollar on Monday, its lowest since Dec. 27, after U.S. President Donald Trump said he will delay raising tariffs on Chinese goods on March 1.
China’s yuan came off a seven-month peak scaled during the previous session.
The offshore yuan was down 0.1 percent at 6.6912 per dollar after rising as high as 6.6737, its strongest since mid-July last year, on Monday.
The Australian dollar, seen as a proxy for China risk because of Australia’s dependence on Chinese demand for its exports, was largely flat at $0.7166.
The euro edged up to $1.1363 after advancing 0.2 percent on Monday.
Editing by Richard Borsuk & Shri Navaratnam