April 9 (Reuters) - China's central bank will not allow sharp yuan declines and has asked major state-owned banks to reduce U.S. dollar purchases, people with direct knowledge of the matter said on Wednesday.

The directive from authorities comes as the yuan faces heavy downward pressure following massive U.S. tariffs on Chinese exports and retaliatory moves by Beijing.

The People's Bank of China (PBOC) sent the window guidance, which is its informal style for managing policy around markets, to state banks this week, asking them to withhold U.S. dollar purchases for their proprietary accounts, three sources said.

The country's big state banks were seen selling dollars and buying yuan aggressively to slow the pace of yuan declines in the onshore spot market on Wednesday, two separate sources said.