SHANGHAI, June 2 (Reuters) - China"s yuan was little changed on Wednesday and pinned in a narrow trading range, after the central bank guided the currency lower amid continued speculation over how much more appreciation authorities will tolerate. The yuan is at 3-year highs. It has risen about 1.4% percent in the past four weeks and clocked its best monthly performance in May since last November. The People"s Bank of China set the midpoint rate at 6.3773 per dollar prior to market open, 201 pips weaker than the previous fix of 6.3572. The spot market opened at 6.3805 per dollar and was changing hands at 6.3825 at midday, unchanged from the previous late session close. The offshore yuan was trading at 6.3825 per dollar. "We expect the Chinese yuan is likely to remain well-supported because of strong export performance, sizeable trade surplus and ongoing capital inflow into Chinese capital markets for both tactical and structural factors," said Chaoping Zhu, global market strategist of J.P. Morgan Asset Management. "The PBOC may opt to curb appreciation momentum from time to time, but a stronger Chinese yuan has its benefits in keeping imported prices low and encourage international capital into the Chinese markets." A host of Chinese policymakers have warned market participants recently against betting on one-sided moves in the currency, and the PBOC this week raised reserve ratios on foreign exchange deposits. "It is possible that they (the PBOC) will have to intervene more heavily in order to get the currency to stabilise and reduce the pace of appreciation. Although the trajectory is clear, I think the issue is they"re not comfortable with the speed at which it has appreciated," said Carlos Casanova, senior Asia economist at Union Bancaire Privee in Hong Kong. A mountain of dollars on deposit in China has grown so large that banks are struggling to loan the currency and traders say it poses a risk to official efforts to control the fast-rising yuan. Market reaction to the latest headlines on Sino-U.S. relations was largely muted. Chinese Vice Premier Liu He exchanged views with U.S. Treasury Secretary Janet Yellen on issues of mutual "concern", in his second virtual call in a week with top economic and trade officials under the U.S. Biden administration. The dollar clung to small gains from overnight on Wednesday, edging back from near a five-month trough versus major peers, as a pick up in U.S. manufacturing kept bets alive for a quicker normalisation of Federal Reserve policy. The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 97.84, weaker than the previous day"s 97.88. The global dollar index fell to 89.899 from the previous close of 89.906. Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan"s value, traded at 6.5375, 2.45 percent away from the midpoint. One-year NDFs are settled against the midpoint, not the spot rate. The yuan market at 3:34AM GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.3773 6.3572 -0.32% Spot yuan 6.3842 6.3825 -0.03% Divergence from 0.11% midpoint* Spot change YTD 2.26% Spot change since 2005 29.64% revaluation Key indexes: Item Current Previous Change Thomson 97.84 97.88 0.0 Reuters/HKEX CNH index Dollar index 89.899 89.906 0.0 *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 6.3825 0.03% * Offshore 6.5375 -2.45% 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 Luoyan Liu, Samuel Shen and Andrew Galbraith; Editing by Kim Coghill) Our Standards: The Thomson Reuters Trust Principles.