SINGAPORE: The yen fell broadly on Friday after Japanese Finance Minister Taro Aso said Japan faced no G20 opposition to its stance that the Bank of Japan's aggressive monetary stimulus is aimed at beating deflation.
The comments by Aso eased concerns that the bold monetary easing, which had triggered a drop in the yen to a four-year low versus the dollar last week, could come under criticism at the G20 meeting.
The dollar rose 0.4 percent on the day to 98.53 yen, while the euro gained 0.5 percent to 128.75 yen.
"The market had been rather nervous about the G20," said a trader for a European bank in Tokyo, adding that such jitters had increased after the United States issued its semi-annual report on the currency practices of major trade partners last week.
In the report, the United States had put Japan on notice that it was watching its economic policies to ensure they were not aimed at devaluing the yen to gain a competitive advantage.
Still, a rapid move higher in the dollar versus the yen seems unlikely at this point, said the European bank trader, adding that strong gains in the greenback might only occur next week, after the G20 meeting is actually over.
Global policymakers are gathered in Washington for a Group of 20 nations meeting on Thursday and Friday. They are expected to confirm a February pledge to avoid competitive currency devaluations, officials have said.
The BoJ's sweeping monetary stimulus unveiled earlier in April had triggered a tide of yen-selling that lifted the dollar to a four-year high of 99.95 yen last week.
The yen, however, has regained a bit of ground this week as renewed concerns about global growth prompted investors to trim bearish positions in the Japanese currency.
Among the biggest losers this week are commodity currencies such as the Australian dollar, which had been stung by worries about growth in China, Australia's single biggest export market.
The Aussie edged up 0.1 percent to $1.0314. The Australian dollar, however, is down 1.8 percent so far this week, on track for its biggest weekly fall since October.
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