* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
    * Yield-curve inversion latest sign of economic trouble
    * Yen, Swiss franc benefit from safe-haven flows
    * Falling Treasury yields pressure dollar/yen

 (Adds Australian dollar, Sterling)
    By Stanley White
    TOKYO, Aug 15 (Reuters) - The yen held gains against major
currencies on Thursday as sliding Treasury yields fanned fears
of a severe global economic downturn and drove investors into
safe-haven assets.
    The latest turbulence in financial markets was triggered by
an inversion in the U.S. Treasury yield curve  US2US10=TWEB  for
the first time in 12 years, which helped lift gold prices and
drove a massive sell-off in U.S. stocks and oil.
     The inversion, where 2-year yields trade higher than
10-year yields, has historically preceded previous economic
    Underscoring the worrying signs, 10-year Treasury yields
slumped to the lowest in three years in Asian trade while
30-year Treasury yields broke below 2%, which took the entire
yield curve below the floor for the Federal Reserve's policy
    Sentiment was already fragile after economic data from China
and Germany revealed the extent of the damage the U.S.-Sino
trade war is causing to two of the world's largest exporters.
    In this dim economic environment, analysts expect safe-haven
currencies, gold, bonds and other low-risk assets to continue to
get a boost.
    "When volatility rises, dollar/yen becomes strongly
correlated with Treasury yields, so the currency pair has more
room to fall," said Junichi Ishikawa, senior foreign exchange
strategist at IG Securities in Tokyo.
    "I expect other safe havens to rise. The mood is downbeat,
because of the trade war and bad economic data."
    The dollar was little changed at 105.90 yen  JPY=EBS  in
Asian trading Thursday. On Wednesday, the yen rallied 0.8%
versus the greenback, its biggest daily gain in two weeks.
    The dollar index  .DXY , which measures its value against a
basket of six major currencies, stood at 97.914 after a 0.2%
gain on Wednesday.
    U.S. bonds remained well bid in Asian trade. The 10-year
Treasury yields skidded to the lowest since September 2016 and
30-year Treasury yields extended their rapid decline, plunging
to an all-time low of 1.9649%. 
    Spot gold  XAU= , which is usually bought in times of
economic uncertainty, rose 0.3% toward the highest in six years.
    Against the dollar, the Swiss franc  CHF=EBS  last traded at
0.9735, holding on to a 0.3% gain posted on Wednesday.
    Investors had plenty of reasons to stay away from riskier
    Ten weeks of increasingly violent clashes between police and
protesters in Hong Kong have plunged the city into its worst
crisis since it reverted to China from British rule in 1997,
which could lead to more risk aversion in the currency market.
    U.S. President Donald Trump on Wednesday tied a U.S. trade
deal with China to a humane resolution to the protests, raising
the stakes in a wide-ranging standoff with China over its trade
and industrial policies.  urn:newsml:reuters.com:*:nL2N25A0YU
    More protests are planned on Friday and over the weekend in
different areas of Hong Kong.
    Sterling was little changed at $1.2069. The pound has been
hemmed into a tight trading range recently due to lingering
uncertainties about whether Britain will exit the European Union
without transitional trading agreements.
    Data on British retail sales are due later Thursday, which
may provide further clues about how consumers are coping with 
heightened concerns about Brexit.
    The Australian dollar  AUD=D3  rose 0.5% to $0.6786 after
data showed the Australian economy added a forecast-busting
41,100 new jobs in July.
    However, reflecting the rising global economic risks,
futures still imply an 84% chance of a quarter point rate cut to
0.75% in October, with November seen better than 100%.
    RBA Deputy Governor Guy Debelle also highlighted the risks
from the trade war in a speech earlier on Thursday, warning it
could trigger a self-fulfilling global downturn.  urn:newsml:reuters.com:*:nS9N23B01A

 (Reporting by Stanley White; editing by Richard Pullin, Sam
Holmes & Shri Navaratnam)
 ((stanley.white@thomsonreuters.com; +81 3 6441 1984