Forex - EUR/JPY gains as G20 sidesteps criticism of Japanese policy

Investing.com - The yen fell against most currencies on Monday including the euro after a G20 summit wrapped up with a statement that avoided criticizing Japan for its weakening currency.

A G7 statement released last week expressed concern over weakening currencies, which most market players interpreted as a warning to Tokyo to avoid actively devaluing the currency.

In U.S. trading on Monday, EUR/JPY hit 125.46, up 0.42% and up from a low of 125.01 and off a high of 125.89.

The pair sought to test support at 122.91, Friday's low, and resistance at 125.95, Thursday's high.

A G20 summit wrapped up with a statement issued that did not censure Japan or accuse it of actively devaluing the yen.

Prime Minister Shinzo Abe has called for looser monetary policies in an effort to prioritize growth over keeping inflation rates in a tight range, and a G20 statement that did not single out Tokyo or any other nation on accusations of failing to allow markets to set exchange rates gave investors the green light to continue shorting the yen.

The single currency did see pressure of its own, however.

European Central Bank President Mario Draghi told the European Parliament earlier that Europe "entered 2013 in a more stable financial environment than in recent years" thanks to various economic reforms, though he warned that eurozone economy remains weak following three quarters of contraction and will only recover slowly this year.

Last week, Eurostat, the statistical arm of the European Union, reported that the eurozone's GDP contracted by 0.6% in the fourth quarter of 2012 from the third, well beyond expectations for a 0.4% decline and far surpassing g the previous 0.1% quarterly contraction.

The dip in total output represented the fastest rate of decline since 2009 and marked a third consecutive quarter of contraction.

The annualized GDP rate fell 0.9%, worse than expectations for a 0.7% contraction, after shrinking at an annualized rate of 0.6% in the previous quarter.

The euro, meanwhile, was up against the pound and up against the Canadian dollar, with EUR/GBP trading up 0.30% at 0.8636 and EUR/CAD trading up 0.35% at 1.3498.

On Tuesday in the eurozone, the ZEW Institute is to release its index of German economic sentiment, a leading indicator of economic health.

The Bank of Japan is to release monetary policy meeting minutes, which contain key insights into economic conditions from the Bank’s perspective.