* Dollar/yen rises; Aussie, kiwi supported
* Liquidity thin due to holidays (Recasts throughout, updates rates, adds comments post-U.S. market open; new byline; previous TOKYO)
By Saqib Iqbal Ahmed
NEW YORK, Dec 26 (Reuters) - The dollar rose against Japanese yen on Thursday as optimism around easing trade tensions between the United States and China sapped demand for the safe-haven currencies, even as the holiday-thinned trading kept large moves in the FX market in check.
Beijing said on Wednesday it is in close touch with Washington on a trade deal signing ceremony, a day after U.S. President Donald Trump said that he and Chinese President Xi Jinping will have a ceremony to sign the recently struck trade deal. is moderately 'on' today on Trump's comment that a trade agreement is "done,'" said John Doyle, vice president for dealing and trading at Tempus Inc in Washington.
"On a usual day, this might just be a blip, but because of the thin conditions, safe-havens like the JPY are a touch weaker and the New Zealand and Australian dollars are up on hopes of a deal," Doyle said.
Against the Japanese yen, which tends to benefit during geopolitical or financial stress as Japan is the world's biggest creditor nation, the dollar rose 0.23% to 109.6 JPY= .
The offshore yuan was about flat on the day against the U.S. currency at 6.991 yuan per dollar CNH= .
Trade-sensitive currencies were stronger on the day. The Australian dollar was 0.22% higher against the greenback, while the New Zealand dollar was up 0.39%.
With global currency markets in holiday mood following Christmas Day on Wednesday and with several centers still closed on Thursday, overall trading activity was subdued.
"Overall, it is so quiet you can hear crickets. Most of the western world remains closed and liquidity is very thin," Tempus' Doyle said.
The dollar index .DXY , which measures the greenback against six other major currencies, was 0.04% lower at 97.616.
Data on Thursday showed the number of Americans filing applications for unemployment benefits fell last week in a sign of ongoing labor market strength. Canadian dollar CAD= was trading 0.2% higher against the greenback at 1.3133 to the U.S. dollar, or 76.14 U.S. cents. Thursday's rise helped the loonie reclaim ground lost earlier this week after data showed Canada's economy unexpectedly shrank by 0.1% in October.
Elsewhere, sterling traded at $1.2991 GBP= , up a bit from levels before the Christmas holiday though still way below its Dec. 13 peak of $1.3514.
http://tmsnrt.rs/2egbfVh
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>