The Group of 20 nations has declared there would be no "currency war".

The group deferred plans to set new debt-cutting targets in an indication of concern about the fragile state of the world economy.

Japan's expansive policies, which have driven down the yen, escaped criticism in a statement agreed in Moscow.

The G20 groups developed and emerging markets and accounts for 90% of the world economy.

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 seen by delegates yesterday had steered clear of the G7's call for fiscal and monetary 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 at price stability and growth.

"The language has been strengthened since our discussions last night," Canadian Finance Minister Jim Flaherty told reporters.

"It's stronger than it was, but it was quite clear last night that everyone around the table wants to avoid any sort of currency disputes."

The communiqué did not single out Japan for aggressive monetary and fiscal policies that have seen the yen drop 20%.

The statement reflected a substantial, but not complete, endorsement of Tuesday's statement by the G7 nations - the US, Japan, Britain, Canada, France, Germany and Italy.

"We all agreed on the fact that we refuse to enter any currency war," French Finance Minister Pierre Moscovici told reporters.

The text also contained a commitment to credible medium-term fiscal strategy, but stopped short of setting specific goals.

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.

"Advanced economies will develop credible medium-term fiscal strategies ... by the St Petersburg summit," the G20 said.

The US, which has resorted to massive monetary stimulus and higher government borrowing to drive growth and cut jobless queues, blocked a push from Europe to commit to reducing budget deficits.

Russian Finance Minister Anton Siluanov said the G20 had failed to reach agreement on medium-term budget deficit levels.

"We expect by April countries will have made progress on reaching a balanced approach to establishing new budget indicators on both, deficit and the level of government debt," Mr Siluanov said.

Russia, this year's chair of the G20, also expressed concern about ultra-loose policies that it and other big emerging economies say could store up trouble for later.

Mr Siluanov said a rebalancing of global growth required more than an adjustment of exchange rates.

"Structural reforms in all countries, either with a positive or negative balance of payments, should play a bigger role," he said, adding that spillover effects of unconventional monetary policy, conducted by central banks in some countries, should be closely monitored.

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 US and others to do more to tackle their debts. The US in turn has urged Germany to do more to increase demand.

On currencies, the G20 text reiterated its commitment last November, to move towards "exchange rate flexibility to reflect underlying fundamentals and avoid persistent exchange rate misalignments".

"The G7 made a very clear statement this week. I think you'll see the G20 echo what was said, and say that currencies should not be used as a tool of competitive devaluation," Britain's Chancellor of the Exchequer George Osborne, said in Moscow.

"Countries shouldn't make the mistake of the past of using currencies as a tool of economic warfare."