By Richard Hubbard
LONDON, Feb 18 (Reuters) - The euro and the dollar gained
against the yen on Monday after the G20 decided not to criticise
Japan for its expansionary policies, but Europe's weak growth
outlook and the approach of Italian elections capped the moves.
Financial leaders from the world's 20 biggest economies
promised in their final statement after a weekend meeting not to
devalue their currencies to boost exports, in a bid to defuse
talk of currency wars among major nations.
The euro gained 0.15 percent to 125.20 yen,
edging up toward a 34-month high of 127.71 yen hit earlier this
month, while the dollar rose 0.5 percent to 93.99 yen,
closer to its highest since May 2010 of 94.46 hit on Feb. 11.
'Future yen direction will continue to be driven by domestic
monetary policy from the Bank of Japan and improving
international investor confidence, which are both driving the
yen weaker,' said Lee Hardman, currency analyst at Bank of
With the G20 meeting over, the focus in European markets is
switching to the release of euro area Purchasing Managers'
Indexes for February and German sentiment indices due later in
the week, and the upcoming general elections in Italy.
Analysts expect the euro area flash PMI indices, which point
to economic activity around six months out, to show growth
stabilising rather than a clear end to the current recession
across the region.
The FTSEurofirst 300 index of top European shares
opened down 0.1 percent at 1,159.87 points, with Germany's DAX , the UK's FTSE and France's CAC-40 flat
to slightly weaker.
Earlier, the effect of the G20 statement and further
announcements from Japan's Prime Minister Shinzo Abe indicating
a renewed drive to stimulate the economy lifted the Nikkei stock
index by 2.1 percent, near to its highest level since
Meanwhile U.S. stock futures were barely changed and
are expected to stay little changed as Wall Street will be
closed on Monday for the Presidents' Day holiday.
In the commodity markets, copper fell 0.7 percent to
$8,150 a tonne as traders played catch up after a week-long
holiday in China last week, with worries about the euro zone
economy weighing on sentiment.
U.S. crude fell 34 cents to $95.50 a barrel but
Brent inched up six cents $117.70.
Gold rebounded by 0.3 percent from a six-month low to
be $1,614 an ounce as jewellers in China returned to the
physical market after the Lunar New Year holiday.
(Reporting by Richard Hubbard. Editing by Giles Elgood)
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