* Yen softer across the board, downtrend intact
* Markets waiting for clues to next BOJ governor
* Euro near 3-wk low, sterling near 6 1/2-mth trough
* Dollar up 0.5 pct vs yen, euro down 0.2 pct vs dollar
By Hideyuki Sano and Ian Chua
TOKYO/SYDNEY, Feb 18 (Reuters) - The yen weakened across the board on Monday, edging near a 33-month low versus the dollar, after Japan escaped direct criticism from its G20 peers on bold reflationary plans that have seen the yen falling.
The Japanese currency dropped further after Prime Minister Shinzo Abe said buying foreign bonds could be among options for the Bank of Japan.
Abe's comments came after the G20 meeting on Friday and Saturday did not single out Tokyo as manipulating currencies for gaining competitive edge.
"The markets seem to interpret that the G20 gave a nod to Japan's position that the yen is adjusting from excessive strength in the past. However, if Japanese policy makers try to verbally intervene by mentioning specific levels, that's probably off-limits," said a trader at a Japanese trading house.
"I'd imagine the dollar could rise a few yen more but if it rises to 100 yen, that will cause more friction (with Japan's major trading partners)," he added.
While the G20 also said its members did not target exchange rates for competitive purposes, Abe reiterated on Monday that the BOJ's monetary easing is aimed at beating deflation, not weakening the yen.
The dollar rose 0.5 percent to 93.98 yen, having bounced smartly from a low near 92.20 on Friday. It came within reach of a 33-month peak around 94.47 set a week ago, though profit-taking by speculators prevented it from testing that level.
The euro gained 0.3 percent to 125.30 yen, edging towards a 34-month high of 127.71 yen hit earlier this month.
Yen bears had turned cautious last week, worried Japan might be openly criticised for allowing the yen to weaken.
In the week ended Feb. 12, currency speculators cut bets against the yen, although they remained bearish on the currency.
"A lightly more nuanced tone in the G20 communique should reassure Japanese policymakers and the market by removing the risk of Japan being labelled as a currency manipulator," analysts at Barclays Capital wrote in a client note.
They said the yen's medium-term downward trend is intact and maintained their 12-month forecast of 100 for dollar/yen.
The market's focus is now on Abe's nominee for the next BOJ governor, expected in coming days.
Sources told Reuters that former top financial bureaucrat Toshiro Muto is leading the field of candidates. It is expected that he would intensify stimulus efforts to reflate the economy.
The euro was listless, staying near a three-week low against the greenback set last Friday.
The single currency has fallen about 2.5 percent since peaking at a 15-month high of $1.3711 on Feb 1 as worries about the health of the euro zone economy weighed on sentiment. Last week, data showed the region slipped into a deeper recession than expected in the last three months of 2012.
"The data has made a rate cut by the European Central Bank more realistic. The euro will come under pressure from its weak economic fundamentals," said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.
The common currency dipped 0.2 percent to $1.3334, though it has support near $1.3310, the 38.2 percent retracement level of its Nov-Feb rally, where it rebounded on Friday.
Some traders expect the single currency to encounter more pressure ahead of an election in Italy on Feb 24-25, with some investors worrying whether there will be stable government after the election.
The British pound also flirted with a 6-1/2-month low of $1.5462 set Friday, last trading at $1.5473. A Bank of England policymaker said on Saturday the currency may need to weaken further to rebalance Britain's economy.