TOKYO - The yen strengthened in Asia Friday ahead of G20 talks where forex issues are expected to top the agenda as Tokyo rejects claims it is manipulating the unit, while the euro sagged on weak GDP data.
In afternoon trade, the dollar weakened to 92.60 yen from 92.87 yen in New York on Thursday, while the euro bought $1.3370 and 123.77 yen, from $1.3385 and 124.10 yen.
Finance ministers and central bankers from the Group of 20 leading economies prepare to meet in Moscow from Friday as Tokyo comes under attack, mostly from Europe, over its monetary policy of big spending, which has pushed down the yen.
The Bank of Japan, under pressure from the new government, last month unveiled a plan for unlimited monetary easing and a target for two per cent inflation.
The moves, which had been expected, added to the yen's weakness and sparked charges of manipulation from around the world and fuelled fears of a currency war where rival nations drive down their currencies to gain a trade advantage.
Since November, the dollar has gained about 15 per cent on the yen, while the euro has jumped about 24 per cent on the Japanese currency.
However, on Thursday the Bank of Japan held off any new policy moves, while its outgoing Governor Masaaki Shirakawa became the latest official to deny claims that Tokyo had orchestrated the slide.
On Thursday Japan's Asahi daily, citing a copy of a draft joint statement, reported that the G20 would warn members off any competitive currency devaluations.
"Ahead of the G20 meeting, caution is emerging over the yen's outlook," Hiroichi Nishi, general manager of equity at SMBC Nikko Securities, told Dow Jones Newswires.
Earlier this week the Group of Seven richest nations issued a statement warning over devaluations, in what was widely seen as a swipe at Tokyo.
And while the International Monetary Fund has called fears of a currency war "overblown" a European official who asked not to be named said: "Japan is not in the clear.
"Everyone understands that this message was addressed to Tokyo as it was not respecting the rules of the collective game." The euro, meanwhile, took a hit after fourth-quarter growth data on Thursday showed the 17-nation bloc's economy shrank 0.6 per cent in the three months to December, confirming it remained stuck in recession.
The dollar was mostly lower against other Asia-Pacific currencies to Tw$29.55 from Tw$29.69 on Thursday, to 1,078.20 South Korean won from 1,084.55 won and 40.59 Philippine pesos from 40.62 pesos.
The greenback was nearly flat at 53.92 Indian rupees from 53.93 rupees, at 29.83 Thai baht from 29.82 baht and at Sg$1.2360 from Sg$1.2361.
It edged up to 9,670 Indonesian rupiah from 9,666 rupiah.
The Australian dollar strengthened to $1.0362 from $1.0352 while China's yuan eased to 14.84 yen from 14.97 yen.