SHANGHAI, April 9 (Reuters) - China"s yuan was flat against the dollar on Friday, despite worries over deteriorating Sino-U.S. ties following the addition of seven Chinese supercomputing entities to a U.S. economic blacklist for assisting Chinese military efforts. Many traders and analysts expect the yuan to come under pressure unless the Biden Administration improves relations with China that had soured during Donald Trump"s presidency. The onshore yuan opened at 6.5470 per dollar and was changing hands at 6.5519 at midday, 3 pips weaker than the previous late session close. Inflation data released on Friday raised some expectations that People"s Bank of China (PBOC) will eventually tighten its monetary policy stance, which would support the yuan, but with the focus currently on sustaining the economy"s recovery from the pandemic there was little prospect for an early increase in interest rates. China"s consumer prices returned to inflation in March after two months of falls, while factory gate prices beat analyst expectations to rise at their fastest annual pace since July 2018, in the latest sign that a recovery in the world"s second-largest economy is gathering momentum. "Inflation has regained policy focus in China as emphasised by Vice Premier Liu He during the State Council meeting yesterday, but we believe the PBOC will not react immediately to the latest data," Xing Zhaopeng, senior China strategist at ANZ in Shanghai said in a note. Xing expected that the PBOC to hold policy steady until the job market improved. Liu told a meeting of the Financial Stability and Development Committee on Thursday that China will implement prudent monetary policy and keep the yuan exchange rate basically stable at reasonable and balanced levels. If the onshore spot yuan finishes the late night session at the midday level, it would have gained 0.24% for the week, snapping seven straight weeks of decline to book the best weekly performance since late January. Prior to market opening, the PBOC set the midpoint rate at 6.5409 per dollar, 54 pips or 0.08% firmer than the previous fix of 6.5463. The global dollar index rose to 92.121 at midday, while the offshore yuan was trading at 6.5592 per dollar. The yuan market at 0400 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.5409 6.5463 0.08% Spot yuan 6.5519 6.5516 0.00% Divergence from 0.17% midpoint* Spot change YTD -0.36% Spot change since 2005 26.32% revaluation Key indexes: Item Current Previous Change Thomson 96.35 96.46 -0.1 Reuters/HKEX CNH index Dollar index 92.121 92.074 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 6.5592 -0.11% * Offshore 6.733 -2.85% 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 Winni Zhou and Andrew Galbraith; Editing by Simon Cameron-Moore)