By Tom Westbrook
SINGAPORE (Reuters) - The safe-haven Japanese yen was firm and the Chinese yuan fragile on Thursday as traders kept a wary eye on the spread of a virus in China, while the ailing Australian dollar jumped after a surprise drop in unemployment.
Deaths from the flu-like coronavirus, rose to 17 on Wednesday. A total of 571 cases have now been confirmed and Chinese state media reported overnight that transport to and from the city of Wuhan in central China, where the outbreak originated, is to be shut from 0200 GMT.
The World Health Organisation will decide later on Thursday whether to declare the situation a global health emergency.
"We'll be taking our leads from China and sentiment on the ground," said Chris Weston, Head of Research at Melbourne brokerage Pepperstone.
"USD/CNH remains a solid guide, and I see risks if we see the cross push into 6.9150 ... with a belief that the Chinese authorities will stimulate should economics be threatened."
The yuan held around 6.9110 per dollar in morning offshore trade , not far above a two-week low hit on Wednesday.
The Japanese yen , seen as a haven by virtue of Japan's position as the world's largest creditor, rose 0.1% to a two week high of 109.65 per dollar as investors sought safety.
The U.S. dollar was otherwise steady, holding at about $1.1093 per euro (EUR=) and at 97.527 against a basket of currencies (DXY).
A major concern is that the virus could spread quickly as millions of people travel across China, and the world, to celebrate the Lunar New Year at their hometowns.
"China's efforts to be transparent is a reprieve for markets, but our suspicion is that cautiousness is likely to remain a near-term theme nonetheless," said Rodrigo Catril, senior FX strategist at National Australia Bank in Sydney.
"For now it remains to be seen if China has managed to contained the outbreak, particularly given the upcoming holidays."
Elsewhere the Australian dollar , which has shed more than a cent this year as the domestic economy stalls, rose 0.5% to $0.6877 after jobs data showed an unexpected drop in unemployment.
The figures showed 28,900 jobs created in December, nearly double market expectations, prompting a rapid unwinding of bets that the central bank will cut rates next month.
Futures pricing shifted quickly from an even probability of a rate cut to only about a 1/4 chance.
The British pound sat a fraction below a three-week high at $1.3147, after an overnight rebound in manufacturing sentiment prompted investors to trim rate cut bets.
Factories' optimism about the outlook rose to its highest since August 2014, according to a quarterly survey from the Confederation of British Industry. The focus now turns to broader business surveys due on Friday.