Summary The euro took a sharp downward turn after fourth-quarter growth data.
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 its currency, while the euro sagged on weak GDP data.
In morning trade, the dollar weakened to 92.75 yen from 92.87 yen in New York on Thursday, while the euro bought $1.3350 and 123.84 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 percent 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 Japanese unit has lost around 17 percent of its value against the dollar and about 25 percent against the euro.
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 sharp downward turn after fourth-quarter growth data on Thursday showed the 17-nation bloc s economy shrank 0.6 percent in the three months to December.
"The key news overnight was the release of worse than expected GDP data for the euro, confirming the ongoing recession in the eurozone," National Australia Bank said in a note.
