Currency wars come to Moscow as G20 meets

Thu Feb 14, 2013 7:01pm EST
 
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* To back thrust of G7 statement on forex

* Final wording likely to diverge

* China opposes line on exchange rate targeting

* Disagreement on deficit reduction goals

By Douglas Busvine and Gernot Heller

MOSCOW, Feb 15 (Reuters) - It won't quite be hand-to-hand combat, but 'currency wars' will come to Moscow on Friday as finance officials from the Group of 20 nations spar over Japan's expansive policies that have driven down the value of the yen.

The G20 forum, which put together a huge financial backstop to halt a market meltdown in 2009, is back in the spotlight after a week in which the Group of Seven rich nations tried, and spectacularly failed, to speak on currencies with one voice.

The G7 has long been the powerhouse of financial diplomacy. But tension between Washington and Tokyo has risen over new Prime Minister Shinzo Abe's bid to end two decades of deflation.

The G7 issued a joint statement on Tuesday reaffirming "our longstanding commitment to market determined exchange rates". Yet the show of unity was quickly undermined by off-the-record briefings critical of Japan.   Continued...