Yen drops as G20 not expected to bash Japan

The yen gave ground to both the dollar and the euro Friday as a much-watched G20 meeting progressed without open criticism of Japan's recent economic and monetary policies.

The dollar at 2200 GMT Friday traded at 93.53 yen, up from 92.79 yen a day earlier.

The euro traded at 124.97 yen, up from 123.97 a day earlier.

Meanwhile the euro edged higher against the dollar, trading at $1.3360, up from $1.3356 late Thursday.

Trade in the yen has been volatile in recent days amid speculation that the G20 meeting in Moscow could focus on Japan's economic and monetary policies.

The meeting comes amid much talk of a "currency war" in which governments compete to devalue their currency in order to boost exports.

Japan has come under special scrutiny following moves by the new administration to stimulate the economy.

Japanese officials defend the policies as necessary to spur job growth and combat deflation, and insist they aren't aimed at lowering the yen's value.

A G7 statement earlier this week appeared to endorse the Japanese program, sending the yen lower. But a subsequent comment from an unnamed G7 official, suggesting unhappiness with Japan, later prompted the yen to appreciate.

Kathy Lien of BK Asset Management said the dollar-yen rate rose on news of a draft G20 statement that suggests Japan will be spared from being singled out for deliberately pushing its currency lower.

"If the G20 gives the all clear, USD/JPY will be on its way to stronger gains," Lien said.

Lien said markets will also be watching next week's economic reports from the European Commission. If forecasts on growth or inflation are revised lower, the euro could slip against the dollar.

The British pound gained on the dollar, trading at $1.5517 Friday compared with $1.5489 a day earlier.

The dollar gained on the Swiss franc, trading at 0.9217, up from 0.9213 Thursday.