* Markets await U.S. trade tariff deadline this week
* Yuan likely to consolidate at current level - trader
* Stocks still under pressure
By Winni Zhou and John Ruwitch
SHANGHAI, July 4 (Reuters) - China's yuan rose sharply against the dollar on Wednesday, a day after the central bank governor assured markets the central bank would keep the currency stable amid heightened worries about trade frictions, although stocks remained under pressure.
The yuan had its worst month on record in June, losing about 3.3 percent of its value against the greenback, and the slide continued on Monday, the first trading day of July.
Chinese currency and equity markets have been on tenterhooks ahead of July 6, when U.S. tariffs on $34 billion worth of Chinese goods are set to kick in. Beijing has said it would retaliate with tariffs on U.S. products.
On Tuesday, the yuan rebounded after People's Bank of China Governor Yi Gang's remarks and continued to ride the updraft on Wednesday, putting it on track for its first two-day winning streak since the middle of June.
At 0248 GMT, it was trading at 6.6288 yuan per dollar, 0.2 percent stronger than the late night close on Tuesday.
"Thankfully for regional risk, the PBOC engaged the yuan airbrake yesterday afternoon and at least for the time being, with the help of Chinese state-owned banks who were seen selling dollars to prop up the Chinese currency, is restoring a sense of calm in regional markets," OANDA wrote in a note.
A trader at a Chinese bank said the market would closely watch and react to developments ahead of July 6, but the PBOC's signal was clear.
"In the short term, the yuan will continue consolidating at the current level, while sharp, one-way falling might have come to an end," the trader said.
Key Chinese equity indexes were less enthusiastic, flip-flopping in a narrow range around Tuesday's closing prices before slipping into negative territory as the morning trading session wore on.
The benchmark CSI300 Index was down around 0.35 percent and the Shanghai Composite Index was off about 0.25 percent by 0250 GMT.
Hong Kong's Hang Seng Index was down more than half a percent, while an index that tracks mainland companies was off three-quarters of a percent. (Editing by Sam Holmes)