LONDON (Reuters) - The euro and the dollar gained against the yen on Monday after the G20 decided not to criticize 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 February 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 Tokyo-Mitsubishi UFJ.
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 stabilizing rather than a clear end to the current recession across the region.
The FTSEurofirst 300 index <.fteu3> of top European shares opened down 0.1 percent at 1,159.87 points, with Germany's DAX <.gdaxi>, the UK's FTSE <.ftse> and France's CAC-40 <.fchi> flat to slightly weaker. <.l><.eu/>
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 <.n225> by 2.1 percent, near to its highest level since September 2008.
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. <.n/>
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 jewelers 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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