Dollar drops against yen ahead of G-20

SYDNEY (MarketWatch) � The dollar declined against the Japanese yen in Asia trading hours Friday, ahead of a meeting of the world�s top finance ministers and central bankers set to start later in the day.

The dollar USDJPY �slipped to 92.27 Japanese yen on Friday, down from �92.85 late the previous day and trading around its lows of the week.

�Once again Japan continues to grab headlines in Asia, with plenty of yen positioning ahead of the [Group of 20] meetings,� IG Markets strategist Stan Shamu said.

At the Moscow gathering, finance leaders of the Group of 20 major economies will back a pledge to �refrain from competitive devaluation� and will monitor �possible monetary-policy spillover,� Bloomberg News reported Thursday, citing a draft statement it had obtained. Read: G-20 reportedly to vow no competitive devaluation

The Japanese currency is likely to be a particular focus for the meeting, given that it has fallen by more than 6% against the dollar in about six weeks, according to FactSet data.

Click to Play How betting against the yen paid off

U.S. hedge-fund investors have made billions off the weakening yen. The prospect of inflation in Japan as the yen weakens may prompt people to turn to gold as a currency hedge.

�All week we have heard conflicting reports on what various leaders think about the yen�s depreciation. As a result ... the G-20 meetings [may] provide some clarity on this,� said Shamu at IG Markets.

The ICE dollar index DXY �which measures the greenback against a basket of six other top currencies, traded at 80.288, down from 80.336 in late North American trading Thursday.

The WSJ dollar index XX:BUXX XX:BUXX , which uses a slightly wider currency basket, eased to 71.59, down from 71.67 late Thursday.

The euro EURUSD �was little changed, inching lower to $1.3361 from $1.3369 in late trading Thursday.

The single currency had lost ground against the dollar Thursday after the release of disappointing euro-zone gross domestic profit data. Read: Dollar advances as euro-zone GDP disappoints

�Any further negative data will weigh on euro/dollar, potentially to break below $1.33. Later today, we have Italian and European trade-balance numbers to look out for,� said Shamu at IG Markets.

In the U.K., investors will be focusing on retail sales data, �which have the potential to derail the pound further should the data disappoint,� he said.

The British pound GBPUSD �rose to $1.5517, up from $1.5492, while Australia�s dollar AUDUSD �traded at $1.0361, up slightly from $1.0353.