* Russian rep says G20 communique won't single out Japan on
* Investors await BOJ nominees, with Muto seen as front
By Lisa Twaronite
TOKYO, Feb 15 The yen firmed against the euro
and dollar in Asian trading on Friday as markets braced for more
conflicting comments on currencies as officials from the Group
of 20 nations gathered in Moscow.
The yen was also underpinned by expectations that Japanese
Prime Minister Shinzo Abe is close to selecting Toshiro Muto as
his nominee for Bank of Japan governor. A decision could come in
the next few days, sources close to the process told Reuters.
While any of Abe's choices is likely to share his views that
the central bank should pursue aggressive stimulus measures to
end nearly two decades of deflation, Muto is seen as less
radical than some of the other likely contenders.
Muto, who served as deputy BOJ governor from 2003 to 2008,
has downplayed the idea advocated by some lawmakers that the
central bank should buy foreign bonds to keep the yen in check.
"There might be some differences in their willingness to
take such steps as foreign bond buying, but all of the
candidates are seen as continuing easy monetary policy," said
Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.
The euro slid about 0.6 percent to 123.49 yen,
off a two-week low of 123.195 earlier in the session. It hit a
34-month high of 127.71 a week earlier.
The dollar shed 0.5 percent to 92.46 yen, dropping as
far as a one-week low of 92.25 yen after taking out weak support
and stop-loss orders at 92.50 yen. Stronger support seen at
92.00 yen. It moved away from a 33-month high around 94.47 set
While some market participants appeared eager to use Muto's
likely nomination as a reason to cover their yen-short positions
ahead of this weekend's conclusion of the G20 meeting, investors
remained wary about the yen's upside with the BOJ under intense
political pressure to reflate the economy.
Japan's expansive policies that have driven down the value
of the yen have been in sharp focus of the G20 finance
Russia's finance "sherpa", Deputy Finance Minister Sergei
Storchak, said the drafting discussion was proving "difficult",
but the final text would not single out Japan for criticism.
Storchak told reporters that there was no competitive
devaluation, but only "market reaction to exclusively internal
"We get a lot of bluster heading into these G20 meetings,
and the end result always seems to that there's no unified view
here. There's going to disagreement, and I doubt there will be a
common view to come out on FX," said Mitul Kotecha, Hong
Kong-based head of global currency strategy at Credit Agricole.
"There will be attention back on the weak growth in some
areas, particularly like the euro zone," he said.
Data on Thursday showing the euro zone slipped deeper into
recession late last year pressured the single currency, and
focused investors' attention back on concerns about Europe's
Against the greenback, the euro rose about 0.1 percent to
$1.3388, having hit a three-week low of $1.3315 on
Thursday. The euro was still well off a 13-month high of $1.3711
set early this month.
Immediate support for euro/dollar is seen around $1.3310, a
level representing the 38.2 percent retracement of its
The pullback in the euro saw the dollar index briefly
hit a one-month high of 80.621 on Thursday, bringing into focus
this year's peak of 80.868 set on Jan. 4. But the resurgent yen
helped pull the index down 0.3 percent to 80.241.