Yuan up in NDFs; U.S.-China trade disputes flare up

* U.S. sets more duties on China steel pipes

* Trade disputes add pressure on yuan appreciation

* But Chinese c.bank seems not ready to change yuan policy

* Yuan peg unsustainable in long run says academic

SHANGHAI, Nov 6 - The yuan rose slightly against the dollar in benchmark offshore non-deliverable forwards on Friday, buoyed by news that the United States slapped preliminary anti-dumping duties on Chinese-made oil well pipes in the biggest U.S. trade action against China.

The duties, which ranged up to 99 percent on Chinese-made oil well pipes and comes a week before U.S. President Barack Obama heads to Asia on a trip that includes stops in Shanghai and Beijing, signalled that the United States was stepping up pressure on China to give concessions in trade, dealers said.

In Sino-American disputes on trade, the yuan has always been a focus as U.S. critics say China purposefully keeps its currency undervalued to gain advantages, while China blames the United States on other issues, including U.S. restrictions on exports of high-technology products to China.

"Each time when senior U.S. officials come to China, currency has always be a major topic," said a dealer at an Asian bank in Shanghai. "NDFs responded to the U.S. duty news today, although China typically doesn't yield to U.S. pressure in this issue."

China on Friday denounced as protectionist the new U.S. anti-dumping duties and vowed to protect the interests of its industry.

Offshore one-year dollar/yuan NDFs fell slightly to 6.6300 bid at midday on Friday compared with Thursday's close of 6.6430.

Twelve-month yuan appreciation implied by NDFs, which moves inversely with the forwards, rose to 2.98 percent measured from the Chinese central bank's daily mid-point, compared with 2.78 percent implied at Thursday's close.

However, in a sign that Beijing is not ready to change its stable yuan policy, the People's Bank of China fixed the yuan's daily mid-point, or reference rate by which the yuan can only rise or fall 0.5 percent in a day, almost unchanged at 6.8276 versus the dollar from Thursday's 6.8277.

In response, onshore spot yuan was nearly flat as well, trading at 6.8275 at midday on Friday, compared with Thursday's close of 6.8276.

The Chinese central bank has kept the yuan at a virtual peg against the dollar since July 2008, confined to a range of only about 100 pips, partly to help insulate China's exports from the turmoil of the global financial crisis.

But with the worst of the crisis now likely over, and China's economy recovering faster than its major trading partners, Western policy makers have renewed calls for Beijing to allow the yuan to appreciate to help address trade imbalances.

Chinese academics are deeply divided on whether Beijing should retain the yuan/dollar peg.

A senior government economist, Zhang Yuyan, said late on Thursday that the yuan's de facto dollar peg was unsustainable in the long run, citing factors including expected increasing pressure on currency policy in the coming months.

In another sign of changing expectations of the yuan's long-term trend, offshore benchmark one-year dollar/yuan volatilities, by which investors hedge their risks in the yuan/dollar exchange rate, jumped to 5.6 percent bid at midday on Friday from Thursday's close of 5.25 percent.