Finance ministers of the G20 nations are meeting in Moscow amid fears of an increased risk of 'currency wars'.
Friction has occurred over the Japanese yen and government policy which has driven down the value of the yen - making it more competitive - in recent months.
The G20 forum, which put together a huge financial backstop to halt a market meltdown in 2009, is back in the spotlight after a week in which the Group of Seven (G7) rich nations tried, and spectacularly failed, to speak on currencies with one voice.
The G7 has long been the powerhouse of financial diplomacy, but tension between Washington and Tokyo has risen over new Prime Minister Shinzo Abe's bid to end two decades of deflation.
The group issued a joint statement last Tuesday reaffirming "our longstanding commitment to market determined exchange rates".
Yet the show of unity was quickly undermined by off-the-record briefings critical of Japan.
Hosts Russia say the G20 - which includes leading emerging markets and accounts for 90% of the world economy - will back the thrust of the G7 text when they issue their communique on Saturday.
Russia's finance "sherpa", deputy finance minister Sergei Storchak, said the drafting discussion was proving "difficult", but the final text would not single out Japan for criticism.
"There is no competitive devaluation, there are no currency wars," Mr Storchak said.
"What's happening is market reaction to exclusively internal decision-making."
That was omitted by the G7 in what Tokyo took to mean its policies had won a free pass.
"As the G20 meeting in Moscow gets underway, the battle lines are drawn - it isn't 'G6 against Japan' as much as it is 'G7 against G13'," French bank Societe Generale (Paris: FR0000130809 - news) said in an analysis note.
The United States, G20 delegation sources said, was blocking attempts to agree on a commitment to cut borrowing to replace a collective pledge to halve budget deficits agreed at the G20 Toronto summit in 2010.
The so-called Toronto goal expires this year.
Meanwhile, the eurozone's largest economy, Germany, and the European Central Bank, want a new borrowing pledge - in line with their own tough medicine for the currency bloc's ailing periphery.
The manoeuvring on currencies is reminiscent of the 1980s, when two accords sought to manage first the excessive strengthening, and then weakening, of the US dollar.
But, with the collapse of communism in eastern Europe and China's adoption of its own brand of capitalism, the world has changed.
Empowered emerging markets now demand a greater say in global financial management - especially after the Western-led global financial crisis.
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