SHANGHAI/BEIJING, Dec 31 (Reuters) - The yuan briefly jumped to a more than 30-month high on Thursday before giving back all the gains at midday, as state banks bought dollars to prevent the local unit from rising too fast. Traders told Reuters that China"s major state-owned banks were seen buying U.S. dollars at a rate of about 6.52 yuan on Thursday, in a move viewed as an effort to keep the local currency from rising too fast and breaching a key level. The onshore yuan opened at 6.5204 per dollar and surged to a high of 6.5148 at one point in morning trade, its loftiest since June 22, 2018. Following the state bank actions, the spot market changed hands at 6.5305 by midday, 59 pips weaker than the previous late session close. Traders said strength in the yuan in early trade mostly reflected the dollar"s movements in global market as investors wager a global economic recovery will suck money into riskier assets even as the yawning U.S. twin deficits argue for an ever cheaper currency. A trader at a foreign bank said the major state-run banks" actions in the spot market were not meant to reverse the yuan"s appreciation trend but rather slow the rapid rallies. "But given the current dollar trend, USD/CNY is likely to fall after the New Year holiday," the trader said. For 2020, the yuan is up nearly 7% and was set to book its first annual gain in three, thanks to the weaker dollar, the widening yield gap between China and the United States and China"s effective coronavirus containment. Earlier gains in the yuan were also supported by solid economic data. China"s factory activity expanded in December as hot export demand fueled a recovery in the world"s second-largest economy. Prior to market opening, the People"s Bank of China (PBOC) set the midpoint rate at 6.5249 per dollar, firmer than the previous fix of 6.5325. The global dollar index traded at 89.658 at midday, when the offshore yuan was trading at 6.5063 per dollar. The yuan market at 0438 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.5249 6.5325 0.12% Spot yuan 6.5305 6.5246 -0.09% Divergence from 0.09% midpoint* Spot change YTD 6.63% Spot change since 2005 26.74% revaluation Key indexes: Item Current Previous Change Thomson 95.03 94.96 0.1 Reuters/HKEX CNH index Dollar index 89.658 89.595 0.1 *Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People"s Bank of China (PBOC) allows the exchange rate to rise or fall 2% from official midpoint rate it sets each morning. OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 6.5063 0.37% * Offshore 6.6668 -2.13% non-deliverable forwards ** *Premium for offshore spot over onshore **Figure reflects difference from PBOC"s official midpoint, since non-deliverable forwards are settled against the midpoint. . (Reporting by Shanghai and Beijing Newsroom; Editing by Sam Holmes)