* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

* Dollar/yen lift by BOJ Kuroda's policy comments fades

* Sterling stands tall on latest Brexit hopes

By Shinichi Saoshiro

TOKYO, Feb 20 (Reuters) - The dollar sagged against its peers on Wednesday in the wake of falling U.S. yields and as investors remained cautious ahead of the Federal Reserve's policy meeting minutes due later in the session.

The U.S. currency has also been weighed down as safe-haven demand for the liquid dollar has ebbed on optimism that a fresh round of talks between China and the United States would help resolve their trade conflict.

The dollar index versus a basket of six major currencies was a touch lower at 96.495 after shedding about 0.4 percent overnight.

"The dollar is weighed with Treasury yields on a downturn. Attempts by participants to price in potentially dovish FOMC (Federal Open Market Committee) meeting minutes are also keeping the dollar on the defensive," said Yukio Ishizuki, senior currency strategist at Daiwa Securities.

The benchmark 10-year U.S. Treasury yield fell sharply to an 11-day low on Tuesday ahead of the Fed meeting minutes, which are due later on Wednesday.

The minutes from the January Fed meeting will be closely watched following a dovish statement from the central bank at their January policy-setting meeting.

The dollar was steady at 110.61 yen, unable to remain near a high of 110.825 touched the previous day after Bank of Japan Governor Haruhiko Kuroda said the central bank was ready to ramp up stimulus if sharp yen rises hurt the economy.

"It's hard for the dollar to retain its gains against the yen as the downward pressure from lower U.S. yields is quite strong," Ishizuki at Daiwa Securities said.

The euro was unchanged at $1.1341 after advancing 0.25 percent on Tuesday, when it brushed a near two-week peak of $1.1358.

The pound was effectively flat at $1.3063 after rallying the previous day to a two-week high of $1.3073.

Sterling had surged more than 1 percent on Tuesday on hopes that British Prime Minister Theresa May will make progress in seeking changes to her Brexit deal with the European Union.

Offshore Chinese yuan extended the previous day's gains to touch 6.74 per dollar, its strongest since Feb. 1.

The yuan had been lifted on Tuesday after Bloomberg reported that said the United States is pressing to secure a pledge from China that it will not devalue its yuan as a part of a trade deal. (Editing by Sam Holmes)