* No progress at deputy-level trade talks -SCMP
* Yen, franc and euro rise
* Yuan drops to one-month low
By Tom Westbrook
SINGAPORE, Oct 10 (Reuters) - The yen rose and the yuan fell on Thursday, after a news report said deputy-level trade talks between Chinese and U.S. officials in Washington had failed to make much headway, sending investors scurrying for safety.
The South China Morning Post, citing unnamed sources familiar with the discussions, said no progress was made on key issues and China's lead negotiator, Vice Premier Liu He, planned leaving Washington a day early.
The safe-havens of the yen and Swiss franc each rose as much as 0.3% though some of the gains were soon retraced after CNBC said the White House was unaware of any plans by the Chinese delegation to leave early.
The yen last stood at 107.35 per dollar and the franc at 0.9936 per dollar. The euro nudged higher to $1.0988.
China's yuan dropped 0.4% to hit five-week low in offshore trade, before it too recovered.
The trade-sensitive Australian and New Zealand dollars hit week lows before turning flat. Against a basket of currencies the dollar fell 0.1% to 99.012.
The moves offered a preview of what to expect if the talks achieve little or nothing, said Joe Capurso, senior currency strategist at the Commonwealth Bank of Australia in Sydney.
"We don't see any easy route to an agreement so we can see this going on for quite some time," he said.
Markets have for weeks gyrated as the likelihood of a breakthrough at the talks has waxed and waned while signs of the toll that the Sino-U.S. trade dispute is taking on the global economy have growth in strength and number.
Optimism that some sort of partial agreement between the parties could be reached had rallied risk assets overnight, before the SCMP report quickly unwound most of the hopes.
"The markets still seem to be travelling with a glimmer of optimism," said Ray Attrill, head of FX strategy at National Australia Bank, with one possibility a deal that staves off U.S. tariff rises in return for agricultural purchases by China.
"But as things stand that looks like a little bit naively optimistic that that was going to be the result of this. We're back to saying that chances are no trade deal."
Tensions had flared leading in to the deputy-level discussions after U.S. imposed visa restrictions on Chinese officials and blacklisted some Chinese tech firms it believes are implicated in the poor treatment of Muslim minorities.
Surprised and upset by the blacklisting, China lowered expectations for progress from the talks, Chinese government officials told Reuters.