Japan's aggressive attempts to spur on its struggling economy were set to escape censure from the G20 nations today as bickering in Moscow kept alive fears of a "currency war".

Finance ministers at the G20 gathering are understood to have pulled back from explicit criticism of Japan, whose prime minister Shinzo Abe has embarked on a huge programme of monetary and fiscal stimulus to jump start the world's third largest economy out of its third recession in five years.

The currency market was thrown into turmoil this week after the G7 – the United States, Japan, Germany, Britain, France, Canada and Italy – issued a joint statement warning against using domestic policy to target currencies.

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But the show of unity was immediately shattered by off-the-record briefings against Japan, which needs a weaker yen to help fuel its export-driven economy.

European Central Bank president Mario Draghi yesterday labelled the behind-the-scenes briefing as "inappropriate, fruitless and self-defeating".

IMF chief Christine Lagarde and Russia's deputy finance minister Sergei Storchak also denied the ex- istence of currency wars, labelling recent swings in the yen as "market reaction to exclusively internal decision making".

G20 officials are set to disregard key parts of the G7 currency statement while making no direct mention of new debt-cutting targets – something Germany is pressing for but which the United States is opposed to.

If adopted by G20 finance ministers today, the wording will confirm that Japan will escape any censure for expansionary policies which have driven the yen lower. The G20 is set to back away from the G7's commitment not to target exchange rates, as China would be unlikely to sign up.

BNY Mellon currency strategist Neil Mellor said: "We're going to end up with a communique so bland and watered down as to be virtually meaningless."

The quantitative easing pursued by central banks around the world – including the Bank of England and the US Federal Reserve – has enraged emerging economies such as Brazil as the value of their foreign reserves dwindles, raising fears over "competitive devaluations".

CMC Markets analyst Michael Hewson said: "What the G7 basically said this week is that it is fine to manipulate your currency as long as you don't talk about it. These 'currency wars' are more like phony wars. The bigger problem the G20 has is not currency wars, it is a lack of growth."

The yen has fallen by about 20 per cent since November but the strengthening euro is also concerning European politicians as the eurozone seeks to climb out of a malaise underlined by a worse-than-expected 0.6 per cent slide in GDP in the final quarter of last year.

French President François Hollande called last week for a medium-term target for the euro, but Bundesbank president Jens Weidmann came out against such a move today, expressing fears of "a politicisation of the exchange rate".

The meeting in Moscow of finance officials from the G20 nations also looked set to lay bare differences over the balance between growth and austerity policies. The draft communique reflected a row brewing between Europe and the United States over extending a promise to reduce budget deficits beyond 2016.

A pact struck in Toronto in 2010 will expire this year if leaders fail to agree to extend it at a G20 summit of leaders in St Petersburg in September.