Yen resumes fall after G20, U.S. holiday thins trade

LONDON (Reuters) - The yen resumed falling on Monday after Japan signaled it would push ahead with expansionist monetary policies having escaped criticism from the world's 20 biggest economies at the weekend.

Industrial metals also dipped and European shares were soft on lingering worries about the economic outlook, especially for the euro zone. While the risk of an inconclusive outcome in Italy's forthcoming election added to investor concerns.

However, activity was curtailed by the closure of markets in the United States for the Presidents' Day holiday.

The yen, which has dropped 20 percent against the dollar since mid-November, fell further after financial leaders from the G20 promised not to devalue their currencies to boost exports and avoided singling out Japan for any direct criticism.

The dollar rose 0.5 percent to 93.95 yen, near a 33-month peak of 94.47 yen set a week ago. The euro added 0.3 percent to 125.40 yen, to be midway between Friday's two-week low of 122.90 and a 34-month high of 127.71 yen hit earlier this month.

Strategists said the yen was likely to stay weak, though its decline could lose momentum until it becomes clear who will be taking the helm at the Bank of Japan when the current governor steps down on March 19.

"The yen probably will weaken a little further in anticipation of more aggressive easing under a new leadership team at the Bank of Japan," said Julian Jessop, chief global economist at Capital Economics.

Japan's Prime Minister Shinzo Abe is poised to nominate the new governor in the next few days. Sources have told Reuters that former financial bureaucrat Toshiro Muto, considered likely to be less radical than other candidates, was leading the field.

Meanwhile the euro dipped slightly against the dollar when European Central Bank president Mario Draghi said the currency's recent gains made any rise in inflation less likely and added that he had yet to see any improvement in the euro zone economy.

Speaking before the European Parliament, Draghi said the euro's exchange rate was not a policy target but was important for growth and stability, adding that appreciation of the euro "is a risk".

The comments left the euro down 0.2 percent at $1.3334.

Elsewhere in the currency market, sterling hit a seven-month low against the dollar, after a key policymaker made comments about the need for further weakness and recent poor data which has kept alive worries of another British recession.

Sterling fell 0.25 percent to $1.5476 having earlier touched $1.5438, its lowest since July 13.

DATA LOOMS

A big week for data on the outlook for the world's economy weighed on other riskier asset markets following the recent dire fourth-quarter growth numbers for the euro zone and Japan, along with Friday's soft U.S. manufacturing figures.

In European markets, attention is focused on the euro area Purchasing Managers' Indexes for February and German sentiment indices due later in the week which could affect hopes for a recovery this year.

Analysts expect Thursday's euro area flash PMI indices, which offer pointers to economic activity around six months out, to show growth stabilizing across the recession-hit region, leaving intact hopes for a recovery in the second half of 2013.

Concerns over an inconclusive outcome in the Italian election on Sunday and Monday have added to the weaker sentiment as a fragmented parliament could hamper a future government's efforts to reform the struggling economy.

The worries about the outlook for Italy were encouraging investors back into safe-haven German government bonds on Monday, with 10-year Bund yields easing 3.5 basis points to be around 1.63 percent.

"Political uncertainty will keep Bunds well bid this week," ING rate strategist Alessandro Giansanti said, adding that only better than expected economic data could create selling pressure on German debt in the near term.

Italian 10-year yields were 4 basis points higher on the day at 4.41 percent.

EARNINGS HIT

European equity markets were taking their lead from corporate earnings reports which have been reflecting the sluggish economic conditions across the region.

Danish brewer Carlsberg , which generates just over 60 percent of its sales in western Europe, became the latest to report a weaker-than-expected quarterly profit, sending its shares to their lowest level in almost a month.

The 5.8-percent drop for shares in the world's fourth biggest brewery helped send the FTSEurofirst 300 index <.fteu3> of top European shares down 0.2 percent. Germany's DAX <.gdaxi>, France's CAC-40 <.fchi> and Britain's FTSE-100 <.ftse> ranged between 0.4 percent up and 0.15 percent lower.

Earlier, the G20 statement and subsequent comment from Prime Minster Abe indicating a renewed drive to stimulate the Japanese economy lifted the Nikkei stock index <.n225> by 2.1 percent, near to its highest level since September 2008.

MSCI's world equity index <.miwd00000pus> was flat as markets extended a two-week period of consolidation that has followed the big run-up in January, when demand was buoyed by the efforts of central banks to stimulate the world economy.

Data from EPFR Global, a U.S.-based firm that tracks the flows and allocations of funds globally, shows investors pulled $3.62 billion from U.S. stock funds in the latest week, the most in 10 weeks after taking a neutral stance the prior week.

But demand for emerging market equities remained strong, with investors putting $1.81 billion in new cash into stock funds, the fund-tracking firm said.

CHINA RETURN

In the commodity markets, traders played catch-up after a week-long holiday last week in China, the world's second biggest consumer of many raw materials, which had kept activity subdued, with worries about the economic outlook weighing on sentiment.

Copper, for which China is the world's largest consumer, dipped to a near three-week low at $8,125.25 a metric ton (1.1023 tons) on the London futures market. Benchmark tin and nickel also touched three-week lows.

Gold managed to edge away from six-month lows as jewelers in China returned to the physical market after the Lunar New Year holiday but a lack of demand from U.S. markets saw the precious metal slip back to be down 0.1 percent to $1,607.06 an ounce.

Crude oil markets were mostly steady after the weak U.S. industrial production data on Friday [ID:nL1N0BF44A] was seen dampening demand, while tensions in the Middle East lent some support.

"We continue to see a mixed picture out of the United States. Industry output was lower than expected but that shouldn't affect the general upward direction," Olivier Jakob, analyst at Geneva-based Petromatrix, said.

Brent crude was down 20 cents at $117.46 a barrel after posting its first weekly loss since the first half of January. U.S. crude slipped 24 cents to $95.62.

(Additional reporting by Marius Zaharia and Ron Bousso; Editing by Philippa Fletcher and Alastair Macdonald)

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Pope, near abdication, says pray "for me and next pope"

VATICAN CITY (Reuters) - Pope Benedict asked the faithful to pray for him and for the next pope, in his penultimate Sunday address to a crowded St. Peter's Square before becoming the first pontiff in centuries to resign.

The crowd chanted "Long live the pope!," waved banners and broke into sustained applause as he spoke from his window. The 85-year-old Benedict, who will abdicate on February 28, thanked them in several languages.

Speaking in Spanish, he told the crowd which the Vatican said numbered more than 50,000: "I beg you to continue praying for me and for the next pope".

It was not clear why the pope chose Spanish to make the only specific reference to his upcoming resignation in his Sunday address.

A number of cardinals have said they would be open to the possibility of a pope from the developing world, be it Latin America, Africa or Asia, as opposed to another from Europe, where the Church is crisis and polarized.

"I can imagine taking a step towards a black pope, an African pope or a Latin American pope," Cardinal Kurt Koch, a Swiss Vatican official who will enter the conclave to choose the next pope, told Reuters in an interview.

After his address, the pope retired into the Vatican's Apostolic Palace for a scheduled, week-long spiritual retreat and will not make any more public appearances until next Sunday.

Speaking in Italian in part of his address about Lent, the period when Christians reflect on their failings and seek guidance in prayer, the pope spoke of the difficulty of making important decisions.

"In decisive moments of life, or, on closer inspection, at every moment in life, we are at a crossroads: do we want to follow the ‘I', or God? The individual interest, or the real good, that which is really good?" he said.

FOR THE GOOD OF THE CHURCH

The pope has said his physical and spiritual forces are no longer strong enough to sustain him in the job of leading the world's 1.2 billion Roman Catholics at a time of crisis for the Church in a fast-changing world.

Benedict's papacy was rocked by crises over the sex abuse of children by priests in Europe and the United States, most of which preceded his time in office but came to light during it.

His reign also saw Muslim anger after he compared Islam to violence. Jews were upset over his rehabilitation of a Holocaust denier. During a scandal over the Church's business dealings, his butler was convicted of leaking his private papers.

Since his shock announcement last Monday, the pope has said several times that he made the difficult decision to become the first pope in more than six centuries to resign for the good of the Church. Aides said he was at peace with himself.

"In a funny way he is even more peaceful now with this decision, unlike the rest of us, he is not somebody who gets choked up really easily," said Greg Burke, a senior media advisor to the Vatican.

"I think that has a lot to do with his spiritual life and who he is and the fact he is such a prayerful man," Burke told Reuters Television.

People in the crowd said the pope was a shadow of the man he was when elected on April 19, 2005.

"Like always, recently, he seemed tired, moved, perplexed, uncertain and insecure," said Stefan Malabar, an Italian in St. Peter's Square.

"It's something that really has an effect on you because the pope should be a strong and authoritative figure but instead he seems very weak, and that really struck me," he said.

The Vatican has said the conclave to choose his successor could start earlier than originally expected, giving the Roman Catholic Church a new leader by mid-March.

Some 117 cardinals under the age of 80 will be eligible to enter the secretive conclave which, according to Church rules, has to start between 15 and 20 days after the papacy becomes vacant, which it will on February 28.

But since the Church is now dealing with an announced resignation and not a sudden death, Vatican spokesman Federico Lombardi said the Vatican would be "interpreting" the law to see if it could start earlier.

CONSULTATIONS BEGUN

Cardinals around the world have already begun informal consultations by phone and email to construct a profile of the man they think would be best suited to lead the Church in a period of continuing crisis.

The Vatican appears to be aiming to have a new pope elected and then formally installed before Palm Sunday on March 24 so he can preside at Holy Week services leading to Easter.

New details emerged at the weekend about Benedict's health.

Peter Seewald, a German journalist who wrote a book with the pope in 2010 in which Benedict first floated the possibility of resigning, visited him again about 10 weeks ago.

"His hearing had deteriorated. He couldn't see with his left eye. His body had become so thin that the tailors had difficulty in keeping up with newly fitted clothes ... I'd never seen him so exhausted-looking, so worn down," Seewald said.

The pope will say one more Sunday noon prayer on February 24 and hold a final general audience on February 27.

The next day he will take a helicopter to the papal summer retreat at Castel Gandolfo, south of Rome, where he will stay for around two months before moving to a convent inside the Vatican where he will live out his remaining years.

(Additional reporting by Hanna Rantala; Editing by Robin Pomeroy)

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Katy Perry Gets a Heart-Shaped Ring from John Mayer

02/17/2013 at 11:45 AM EST

Katy Perry and John Mayer on Feb. 14 with her ring (inset)

David Tonnessen/Pacific Coast News

John Mayer put a ring on Katy Perry's finger – just not the kind you might expect.

After the couple was photographed leaving Vincenti, an Italian restaurant in Los Angeles, on Valentine's Day, Perry was spotted wearing a ruby on her ring finger, leaving many to ask if Mayer, 35, had popped the question.

Although Perry, 28, is beaming in the photo, a source tells PEOPLE the couple is "not engaged."

While the one-of-a-kind ring was created by Daniel Gibbings, a Santa Barbara based jeweler and designer, it may have nothing more than a Valentine's Day gift that a rep for Gibbings says the singer-songwriter selected himself.

Mayer was "really super nice" while shopping for his girlfriend, the rep adds.

But as for speculation over whether the heart-shaped ring could be seen as a possible engagement ring, the rep says that while it's not a traditional design, "it can be."

"[Gibbings] uses a lot of texture. The style of his engagement rings are not the usual Neil Lane looking ring. They are definitely more trendy or boho," the rep adds.

• With reporting by JENNIFER GARCIA & JESSICA HERNDON

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UN warns risk of hepatitis E in S. Sudan grows

GENEVA (AP) — The United Nations says an outbreak of hepatitis E has killed 111 refugees in camps in South Sudan since July, and has become endemic in the region.

U.N. refugee agency spokesman Adrian Edwards says the influx of people to the camps from neighboring Sudan is believed to be one of the factors in the rapid spread of the contagious, life-threatening inflammatory viral disease of the liver.

Edwards said Friday that the camps have been hit by 6,017 cases of hepatitis E, which is spread through contaminated food and water.

He says the largest number of cases and suspected cases is in the Yusuf Batil camp in Upper Nile state, which houses 37,229 refugees fleeing fighting between rebels and the Sudanese government.

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Florida hit by "tsunami" of tax identity fraud

MIAMI (Reuters) - Bruce Parton was only a few weeks from retirement after 30 years as a mail carrier in sunny Florida.

He never lived to fulfill his retirement plan of moving back to a quiet life in the Catskill mountains of New York, not far from where he grew up on Long Island.

Instead, he was gunned down on his daily mail route in December 2010 by members of an identity theft ring who stole his master key as part of a scheme to claim fraudulent tax refunds.

Using stolen names and Social Security numbers, criminals are filing phony electronic tax forms to claim refunds, exploiting a slow-moving federal bureaucracy to collect the money before victims, or the Internal Revenue Service, discover the fraud.

Parton was a victim of what officials say has ballooned into a massive, and dangerous, illegal industry that could cost the nation $21 billion over the next five years, according to the U.S. Treasury Department.

While that is a relatively small sum compared to the $1.1 trillion collected from individual tax payers in the last fiscal year, the crime has been growing by leaps and bounds in the last three years.

"We are on the top of a national trend that is causing a hemorrhage of tax dollars," said Wifredo Ferrer, United States Attorney for south Florida. "It's a tsunami of fraud."

While the IRS says it has detected cases in every state except North Dakota and West Virginia, the fraud's epicenter is Florida, and it is mostly concentrated in Miami and Tampa.

Miami has 46 times the per-capita rate of false tax refund claims than the rest of the country, and 70 times the national average in dollar terms, Ferrer told Reuters.

"For whatever reason, we always tend to lead the nation when it comes to fraud," he said, noting that his office has been battling massive Medicare fraud in recent years that has since spread to other parts of the country.

Florida's high proportion of older residents, who can be more vulnerable to fraud, may be one reason for the high levels of fraud in the state.

Nationwide, the number of cases of tax identity theft detected by authorities sky-rocketed to more than 1.2 million cases in 2012 from only 48,000 in 2008, according to the Treasury Department.

The real number of phony tax filings is likely much higher as the fraud is hard to track, according to a November General Accountability Office report.

GANG LINKS

The tax ID theft problem is particularly troubling as, unlike Medicare fraud, it is associated with violent crime and armed gangs.

Tampa police first detected it in 2010 when officers discovered wanted street criminals engaged in tax fraud. "They were holed up in hotels with laptops churning out tax claims," said congresswoman Kathy Castor, who represents the area and is pressing the IRS to get tougher on the fraud.

When agents raided a Howard Johnson in East Tampa in late 2010, they found suspects smoking marijuana and four laptop computers being used to file fraudulent tax returns on Turbo Tax, the tax preparation software, according to police records.

The suspects had lists of personal information containing more than 1,000 names and confidential personal information, multiple re-loadable debit cards, and records of numerous financial transactions. The investigation revealed that the suspects had been camped out in the hotel room for more than a week filing claims.

Tax identity fraudsters are apparently drawn by the ease of the crime, officials say.

"The scheme is very basic, it works virtually the same in almost every case," said Ferrer. "All they need is your name and the tax ID number."

Armed with that information a refund claim can be filed electronically, making up other details on the form, including addresses, employer data, income and deductions.

Criminals obtain the vital numbers using various tactics, often by bribing office workers with access to personnel files inside companies, as well as large public institutions such as hospitals and schools, according to prosecutors.

Last summer a hacker stole 3.8 million unencrypted tax records from the South Carolina Department of Revenue in what is believed to be the largest security breach of a U.S. tax agency. Authorities say they do not know the hacker's motive.

One North Miami man, Rodney Saint Fleur, was charged last year with using the LexisNexis research service account at the law firm where he worked to access names and Social Security numbers of 26,000 people as part of an identity theft scheme, according to court documents.

Victims in Florida have varied from hospital patients, to Holocaust survivors at an elderly Jewish community center, as well as active duty military serving overseas.

In December, a former U.S. Marine from North Miami was sentenced to nearly five years in prison for stealing the identities of more than 40 fellow Marines stationed at Camp Leatherneck in Afghanistan as part of a plot to claim $54,000 in fraudulent income-tax refunds.

In Parton's case the criminals were after his master key that gives postal workers access to mail drop-off boxes and apartment mailboxes. He was shot twice in the chest by a gunman as part of a plot to steal identities in people's mail for tax refund fraud.

The gunman, Pikerson Mentor, 31, was sentenced last month to life plus 42 years.

More than 600 people turned up for Parton's funeral, including postal workers and people who got to know him on his route. "He had been doing that mail route for 10 years and he always had a smile for everyone," said his daughter, Nina Parton.

The criminals stay under the radar using identities of the elderly or the very young, who are unlikely to be filing for earned income, as well as the deceased. They typically claim small refunds, around $3,000, but use multiple identities, with payments often made to pre-paid debit cards.

FIGHTING BACK

The IRS said last week it is intensifying a crackdown on identify theft, with 3,000 agents devoted to tackling the problem, double the number assigned in 2011.

The number of IRS criminal investigations into identity theft more than tripled in the year to September 2012, and it was on pace to double again this year, acting IRS Commissioner Steven Miller told reporters.

The tax collection agency prevented $20 billion in attempted tax refund fraud in fiscal year 2012, up from $14 billion a year earlier, he said.

"It's one of the biggest challenges that faces the IRS today," Miller said. "We're doing much better on all fronts but we have much more to do."

Despite the increase in investigations, the agency still had a backlog of 300,000 cases of people waiting for legitimate refunds after they were victims of fraud. It takes an average of six months to resolve a case, Miller said.

"The IRS have put a lot of resources on it, but they always seem to be behind the curve," said Keith Fogg, a tax professor at Villanova University School of Law.

Electronic filing, which now accounts for 80 percent of returns and was introduced to speed up delivery of refunds, has made the system more vulnerable to fraud.

The IRS is seeking to speed up the loading of data from W-2 payroll forms issued at the beginning of the tax season, a time lapse which gives fraudsters a window of opportunity to file using false data.

The IRS is also looking for ways to authenticate the identity of tax filers at the time of filing to pre-empt fraud, as well as working with the Social Security Administration to limit access to a registry of social security data of deceased tax payers, the so-called "Death Master File", a frequent target of fraud.

"We will not be prosecuting our way out of this. That's not going to be the answer. We're going to have to make it more and more difficult for criminals to profit from this behavior," said Miller. "If they're not successful they will move onto something else."

(Editing by Mary Milliken and Claudia Parsons)

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Pistorius, slain girlfriend had planned future: uncle

JOHANNESBURG (Reuters) - South African Paralympic champion Oscar Pistorius, known as the "Blade Runner", was planning a future with the girlfriend he is accused of shooting dead this week, his uncle said on Saturday.

Pistorius, 26, one of the world's most recognizable athletes, was charged on Friday with murdering swimsuit model and law graduate Reeva Steenkamp in the early hours of the previous day.

He broke down during a 40-minute bail hearing at a Pretoria court but was not asked to enter a plea.

"They had plans together and Oscar was happier in his private life than he had been for a long time," Anthony Pistorius said in a statement released by his nephew's agent.

"We are in a state of total shock - firstly about the tragic death of Reeva who we had all got to know well and care for deeply over the last few months," he said. "All of us saw at first hand how close she had become to Oscar during that time and how happy they were."

The suggestion that Pistorius' family was close to Steenkamp runs counter to comments from Pistorius' father, Henke, who told the New York Times he had never met his son's partner.

"I don't discuss my son's relationships. I have, in fact, not met the lady," he was quoted as saying.

Prosecutors alleged the shooting was premeditated, a charge that could put Pistorius behind bars for life if convicted.

Police have said there are no other suspects and the pair were the only people in the house at the time. Initial reports suggested he may have mistaken her for an intruder.

Anthony Pistorius reiterated the family's belief that the track star - a double amputee who became one of the biggest names in world athletics when he ran at last year's Olympics - had not shot Steenkamp deliberately.

"After consulting with legal representatives we deeply regret the allegation of premeditated murder," Anthony said.

"We have no doubt there is no substance to the allegation and that the state's own case, including its own forensic evidence, strongly refutes any possibility of a premeditated murder or indeed any murder at all."

NUMB

Pistorius is being held in a Pretoria police station before the resumption of his bail hearing on Tuesday. He is "numb" with shock and grief, the statement said.

Several South African media reports have said Steenkamp was shot through the bathroom door and was hit four times - in the head, hip, arm and hand.

Police said on Thursday witnesses had heard disturbances at the home before the shots, adding that there had been previous incidents of a "domestic nature" at the home.

The shooting has shocked South Africa, where Pistorius was revered as a hero whose achievements transcended the racial divides that linger in Nelson Mandela's "Rainbow Nation" 19 years after the end of apartheid.

The disbelief was felt across the globe among the millions who saw in Pistorius the ultimate tale of triumph over adversity - a man who rose to the highest pinnacles of athletics despite having no lower legs.

He was born without either fibula but reached the semi-final of the 400-metres in the London 2012 Olympics, running on high-technology carbon fiber prosthetic 'blades'. He also won two Paralympic gold medals and one silver medal.

Although the public image was of a charming and easy-going young man, a Twitter posting by Pistorius in November paints the picture of a would-be action man obsessed with security.

"Nothing like getting home to hear the washing machine on and thinking it's an intruder to go into full combat recon mode into the pantry! waa," read the Tweet on the morning of November 27

Police recovered a 9mm pistol from his home after the shooting. The Afrikaans-language Beeld newspaper said Pistorius had a license for one firearm and applications pending for a further seven, including a semi-automatic rifle.

Police declined to comment on the Beeld report.

"We're releasing nothing," spokeswoman Katelgo Mogale said. "Details of the incident will come out in court."

South African state broadcaster SABC will on Saturday evening air the first episode of a tropical island reality show featuring Steenkamp that was filmed last year in the Caribbean.

SABC said her family had given their blessing to the show's airing, which will be preceded by a short tribute.

(Reporting by Ed Cropley; Editing by Angus MacSwan and Jason Webb)

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Blue Ivy Looks Just Like Dad Jay-Z in New Photo

02/16/2013 at 11:30 AM EST

Daddy's little girl, indeed!

A new photo of Beyoncé and Jay-Z's 1-year-old daughter Blue Ivy – apparently leaked from the songstress's upcoming HBO documentary – shows the proud mama holding up her little girl, who bears a striking resemblance to her famous papa.

"When I wake up in the morning, the best thing in the world is seeing her face," the pop star said earlier this month.

"She's starting to talk. It's just such a beautiful time in my life to have a child and every day see something new and see her learn something new."

This marks the second time fans are getting a good look at Blue Ivy. One year ago, when Blue Ivy was just 4-weeks-old, her famous parents shared photos of their precious new arrival.

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UN warns risk of hepatitis E in S. Sudan grows

GENEVA (AP) — The United Nations says an outbreak of hepatitis E has killed 111 refugees in camps in South Sudan since July, and has become endemic in the region.

U.N. refugee agency spokesman Adrian Edwards says the influx of people to the camps from neighboring Sudan is believed to be one of the factors in the rapid spread of the contagious, life-threatening inflammatory viral disease of the liver.

Edwards said Friday that the camps have been hit by 6,017 cases of hepatitis E, which is spread through contaminated food and water.

He says the largest number of cases and suspected cases is in the Yusuf Batil camp in Upper Nile state, which houses 37,229 refugees fleeing fighting between rebels and the Sudanese government.

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G20 steps back from currency brink, heat off Japan

MOSCOW (Reuters) - The Group of 20 nations declared on Saturday there would be no currency war and deferred plans to set new debt-cutting targets, underlining broad concern about the fragile state of the world economy.

Japan's expansive policies, which have driven down the yen, escaped direct criticism in a statement thrashed out in Moscow by policymakers from the G20, which spans developed and emerging markets and accounts for 90 percent of the world economy.

Analysts said the yen, which has dropped 20 percent as a result of aggressive monetary and fiscal policies to reflate the Japanese economy, may now continue to fall.

"The market will take the G20 statement as an approval for what it has been doing -- selling of the yen," said Neil Mellor, currency strategist at Bank of New York Mellon in London. "No censure of Japan means they will be off to the money printing presses."

After late-night talks, finance ministers and central bankers agreed on wording closer than expected to a joint statement issued last Tuesday by the Group of Seven rich nations backing market-determined exchange rates.

A draft communiqué on Friday had steered clear of the G7's call for economic policy not to be targeted at exchange rates. But the final version included a G20 commitment to refrain from competitive devaluations and stated monetary policy would be directed only at price stability and growth.

"The mood quite clearly early on was that we needed desperately to avoid protectionist measures ... that mood permeated quite quickly," Canadian Finance Minister Jim Flaherty told reporters, adding that the wording of the G20 statement had been hardened up by the ministers.

As a result, it reflected a substantial, but not complete, endorsement of Tuesday's proclamation by the G7 nations - the United States, Japan, Britain, Canada, France, Germany and Italy.

As with the G7 intervention, Tokyo said it gave it a green light to pursue its policies unchecked.

"I have explained that (Prime Minister Shinzo) Abe's administration is doing its utmost to escape from deflation and we have gained a certain understanding," Finance Minister Taro Aso told reporters.

"We're confident that if Japan revives its own economy that would certainly affect the world economy as well. We gained understanding on this point."

Flaherty admitted it would be difficult to gauge if domestic policies were aimed at weakening currencies or not.

NO FISCAL TARGETS

The G20 also made a commitment to a credible medium-term fiscal strategy, but stopped short of setting specific goals as most delegations felt any economic recovery was too fragile.

The communiqué said risks to the world economy had receded but growth remained too weak and unemployment too high.

"A sustained effort is required to continue building a stronger economic and monetary union in the euro area and to resolve uncertainties related to the fiscal situation in the United States and Japan, as well as to boost domestic sources of growth in surplus economies," it said.

A debt-cutting 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.

The United States says it is on track to meet its Toronto pledge but argues that the pace of future fiscal consolidation must not snuff out demand. Germany and others are pressing for another round of binding debt targets.

"We had a broad consensus in the G20 that we will stick to the commitment to fulfill the Toronto goals," German Finance Minister Wolfgang Schaeuble said. "We do not have any interest in U.S.-bashing ... In St. Petersburg follow-up-goals will be decided."

The G20 put together a huge financial backstop to halt a market meltdown in 2009 but has failed to reach those heights since. At successive meetings, Germany has pressed the United States and others to do more to tackle their debts. Washington in turn has urged Berlin to do more to increase demand.

Backing in the communiqué for the use of domestic monetary policy to support economic recovery reflected the U.S. Federal Reserve's commitment to monetary stimulus through quantitative easing, or QE, to promote recovery and jobs.

QE entails large-scale bond buying -- $85 billion a month in the Fed's case -- that helps economic growth but has also unleashed destabilising capital flows into emerging markets.

A commitment to minimize such "negative spillovers" was an offsetting point in the text that China, fearful of asset bubbles and lost export competitiveness, highlighted.

"Major developed nations (should) pay attention to their monetary policy spillover," Vice Finance Minister Zhu Guangyao was quoted by state news agency Xinhua as saying in Moscow.

Russia, this year's chair of the G20, admitted the group had failed to reach agreement on medium-term budget deficit levels and expressed concern about ultra-loose policies that it and other emerging economies say could store up trouble for later.

On currencies, the G20 text reiterated its commitment last November, "to move more rapidly toward mores market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments".

It said disorderly exchange rate movements and excess volatility in financial flows could harm economic and financial stability.

(Additional reporting by Gernot Heller, Lesley Wroughton, Maya Dyakina, Tetsushi Kajimoto, Jan Strupczewski, Lidia Kelly, Katya Golubkova, Jason Bush, Anirban Nag and Michael Martina. Writing by Douglas Busvine. Editing by Timothy Heritage/Mike Peacock)

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Meteor explodes over central Russia, 500 people hurt

CHELYABINSK, Russia (Reuters) - A meteor streaked across the sky and exploded over central Russia on Friday, sending fireballs crashing to earth which shattered windows and damaged buildings, injuring more than 500 people.

People heading to work in Chelyabinsk heard what sounded like an explosion, saw a bright light and then felt a shockwave, according to a Reuters correspondent in the industrial city 950 miles east of Moscow.

The fireball, travelling at a speed of 19 miles per second according to Russia's space agency Roscosmos, had blazed across the horizon, leaving a long white trail in its wake which could be seen as far as 125 miles away.

Car alarms went off, windows broke and mobile phone networks were interrupted. The Interior Ministry said the meteor explosion had caused a sonic boom.

"I was driving to work, it was quite dark, but it suddenly became as bright as if it was day," said Viktor Prokofiev, 36, a resident of Yekaterinburg in the Urals Mountains.

"I felt like I was blinded by headlights," he said.

No fatalities were reported, but President Vladimir Putin, who was due to host Finance Ministry officials from the Group of 20 nations in Moscow, told Emergencies Minister Vladimir Puchkov to help those affected.

"Unfortunately, the normal work of some industrial enterprises was disrupted, people have suffered as has social infrastructure - kindergartens, schools," Putin told his Emergencies Minister Sergei Puchkov in televised comments.

"First of all, it is necessary to think about how to help the people, and not only to think about it, but to do it immediately," Putin said.

A local ministry official said such incidents were extremely rare and Friday's events might have been linked to an asteroid the size of an Olympic swimming pool due to pass earth. However, the European Space Agency on its Twitter website said its experts had confirmed there was no connection.

"There have never been any cases of meteorites breaking up at such a low level over Russia before," said Yuri Burenko, head of the Chelyabinsk branch of the Emergencies Ministry.

Russia's Emergencies Ministry said 514 people had sought medical help, mainly for light injuries caused by flying glass, and that 112 of them were kept in hospital.

Despite warnings not to approach any unidentified objects, some enterprising locals were hoping to cash in.

"Selling meteorite that fell on Chelyabinsk!," one prospective seller, Vladimir, said on a popular Russian auction website. He attached a picture of a black piece of stone that on Friday afternoon was priced at $49.46.

WINDOWS BREAK, FRAMES BUCKLE

The blast at around 9.20 a.m. (12:20 a.m. ET) shattered windows on Chelyabinsk's central Lenin Street and some of the frames of shop fronts buckled. The shockwave could be felt in apartment buildings in the city's center.

"I was standing at a bus stop, seeing off my girlfriend," said Andrei, a local resident who did not give his second name. "Then there was a flash and I saw a trail of smoke across the sky and felt a shockwave that smashed windows."

Chelyabinsk city authorities urged people to stay indoors unless they needed to pick up their children from schools and kindergartens. They said what sounded like a blast had been heard at an altitude of 32,800 feet.

A wall was damaged at the Chelyabinsk Zinc Plant but a spokeswoman said there was no environmental threat.

Although a rare occurrence, a meteorite is thought to have devastated an area of more than 1,250 miles in Siberia in 1908, smashing windows as far as 125 miles from the point of impact.

The Emergencies Ministry described Friday's events as a "meteor shower in the form of fireballs" and said background radiation levels were normal. It urged residents not to panic.

Simon Goodwin, an astrophysics expert from Britain's University of Sheffield, said it was estimated between 1,000 and 10,000 tonnes of material rained down from space onto the earth every day, but most burned up in the atmosphere.

"While events this big are rare, an impact that could cause damage and death could happen every century or so," he said. "Unfortunately there is absolutely nothing we can do to stop impacts."

The meteor struck just as an asteroid known as 2012 DA14, about 46 meters in diameter was due to pass closer to earth than any other known object of its size since scientists began routinely monitoring them about 15 years ago.

The small asteroid was expected to pass at a distance of 17,100 miles from earth on Friday.

(Additional reporting by Gabriela Baczynska in Moscow, Writing by Alexei Anishchuk and Timothy Heritage, Editing by Michael Holden)

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