* Yen rebounds after official warns on recent moves
* Investors likely to be wary ahead of G20 meeting
* BOJ policy meeting ends on Thursday
By Nia Williams
LONDON, Feb 13 (Reuters) - The yen rose against the dollar and was steady against the euro on Wednesday, holding gains made after an official from the Group of Seven cited concerns about excessive weakness in Japan’s currency.
Investors are concerned policymakers will use a G20 meeting later this week to caution against the pace of the yen’s recent falls, which could help the Japanese currency extend its rebound.
The yen leapt in a volatile session on Tuesday after a G7 official said a statement from the group was meant to signal worries about excessive moves in the currency.
The dollar extended losses on Wednesday, dropping 0.2 percent on the day to 93.26 yen. It hit a near three-year high of 94.465 on Monday. Earlier in the session it fell as low as 92.82 yen.
The euro was flat at 125.80 yen, retreating from the 34-month high of 127.71 hit last week, and some market players said it would remain vulnerable to profit-taking in the run-up to the G20 meeting.
“The yen crosses will come lower ahead of the weekend, mostly because it’s an excuse to take profit, given how far we have come,” said Geoff Kendrick, FX strategist at Nomura.
“Presumably on the weekend there will be something that talks about the pace of moves in the yen. That’s what the market is expecting now.”
Westpac strategists recommended selling dollar/yen via options.
The yen had lost nearly 20 percent against the dollar since November, picking up speed as Japan’s new government put pressure on the Bank of Japan to ease monetary policy more aggressively to defeat deflation. That gave investors incentive to sell yen.
While many were cautious before the G20 meeting some market participants said the G7’s words would not alter the yen’s downtrend.
“Overall, what the G7 said did not change the basic thinking in the Tokyo market, and no one expects the yen to fall back to previous ranges in the 80s [against the dollar] because of it,” said Toshiyuki Suzuki, senior market economist at the Bank of Tokyo-Mitsubishi UFJ in Tokyo.
In their statement, G7 governors and ministers reaffirmed their commitment that fiscal and monetary policies would not be directed at devaluing currencies.
Investors were also likely to tread cautiously until the outcome of a BOJ meeting ending on Thursday, although many expect the bank to hold off on any fresh easing measures until a new governor takes the helm.
G20 finance officials meet in Moscow on Friday and Saturday.
The euro edged up 0.1 percent to $1.3465, with traders citing demand from Middle East buyers.
Some strategists said the euro would be largely sidelined before the G20 meeting, although it could come under pressure if euro zone gross domestic product data on Friday shows the economy contracting.
The euro has retreated from a 15-month high of $1.3711 hit at the start of February. It extended losses last week when European Central Bank President Mario Draghi warned on downside risks to the euro zone growth outlook.
The single currency fell against the Swedish crown to 8.4975 crowns, its lowest since early October. The crown rose after the Riksbank kept interest rates on hold, wrongfooting some market players who had positioned for a cut.