* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Daniel Leussink
TOKYO, May 22 (Reuters) - The dollar hovered near afour-week high on Wednesday, supported by higher U.S. yieldsafter the United States eased trade restrictions on Chinesetelecommunications equipment maker Huawei Technologies.
"The trade dispute won't be resolved easily, so the risk-offmood won't come off all of a sudden. I think market sentimentwill rather improve one small step at a time," said Ayako Sera,market strategist at Sumitomo Mitsui Trust Bank.
Against a basket of key rival currencies, the dollar waslast a shade lower at 98.014 .DXY , having brushed a 3-1/2-weekhigh of 98.134 overnight. The index has risen 1.9% so far thisyear.
The U.S. Commerce Department blocked Huawei Technologies CoLtd HWT.UL from buying U.S. goods last week, leading severalcompanies to suspend business with the world's largest telecomsequipment maker.
Chipmakers, many of which sell to Huawei, bore the brunt ofthe sell-off. But late on Monday, the United States grantedHuawei a licence to buy U.S. goods until Aug. 19. urn:newsml:reuters.com:*:nL2N22W19U
Against the yen, the dollar was largely steady at 110.49 yenJPY= , having hit a two-week high of 110.675 during theprevious session. The greenback has recovered 1.4% from athree-month trough of 109.02 yen touched on Monday last week.
Japan's exports fell 2.4% in April from a year earlier, downfor a fifth straight month, in a sign of weakness in externaldemand, finance ministry data showed, compared with a 1.8%decrease expected by economists in a Reuters poll. urn:newsml:reuters.com:*:nT9N22K00R
Sumitomo Mitsui's Sera said the yen's weakness overnight wasthanks to the higher U.S. Treasury yields, which ticked up inresponse to the recovery in U.S. equities.
"When yields are rising, it's natural for the dollar to bebought. I think moves in U.S. yields are really important," shesaid.
The 10-year U.S. Treasury note yield US10YT=RR was lastlargely unchanged at 2.423% after moving further off aseven-week low of 2.354% brushed on Thursday during the previoussession.
The euro EUR= was steady at $1.1162EUR= .
The single currency, which has given up 0.9% from thismonth's high touched on May 1, has been under pressure in recentweeks on dollar strength and due to concerns the upcomingEuropean parliamentary elections may see euroskeptic partiesfaring well.
The pound was at $1.2713GBP=D4 , hovering near afour-month low of $1.2685 touched overnight. It briefly roseovernight after Prime Minister Theresa May set out a "new deal"for Britain's departure from the EU, offering sweeteners toParliament including the chance to vote on whether to hold asecond referendum to try to break the impasse over Brexit.
Yet traders doubted that a fractious Parliament would haveto back any new referendum.
(Editing by Shri Navaratnam) ((email@example.com; Twitter: @danielleussink;+81-3-6441-1825; Reuters Messaging:firstname.lastname@example.org))