G20 should focus on debts, not Japan-bashing: Russia By Lidia Kelly MOSCOW (Reuters) - Russia's top financial diplomat said the Group of 20 should focus on making new commitments to curb borrowing, and not rush to judge Japan's bid to reflate its economy when policy makers meet this month. Moscow hosts finance ministers and central bankers on February 15-16 as controversy over "currency wars" has opened a rift between indebted rich nations and faster-growing exporters who fear a wave of competitive devaluations. Russia is the first big emerging economy to assume the annual presidency of the G20, which became the world's top crisis management forum after the 2008 crash. One of its central bankers has accused Tokyo of "protectionist monetary policy." But its finance 'sherpa', Deputy Finance Minister Sergei Storchak, told Reuters the currency debate should be kept within sensible bounds. "It cannot go without a reaction, but the reaction must be proper, so as not to send signals to the market that are disproportionate to the problem," Storchak said in an interview on Thursday night. Spurring widespread criticism, the Bank of Japan announced last month that it would buy unlimited amounts of assets and double its inflation target to 2 percent in a bid to escape two decades of deflationary stagnation. "Japan is an open economy and I think that one should think a lot - a lot - before accusing it of a competitive devaluation," Storchak said, echoing a conciliatory line taken by Russia's top summit sherpa, Ksenia Yudayeva. Storchak added that the unorthodox monetary policies pursued in recent years, including in the United States and euro zone, showed how inadequate their growth models were in a post-crisis world. "One country cannot live from imports, and another just from exports," he said. The G20 accounts for 90 percent of the world economy and two-thirds of its population, making it the most practical and representative forum to conduct the global policy debate. Yet although countries led by China and Russia own trillions of dollars in reserves, mainly invested in the sovereign debt of developed nations, they have a relatively small voice at the world's lender of last resort, the International Monetary Fund. The IMF has missed a self-imposed deadline to agree a new formula for allocating voting power among its members, however. Storchak played down chances of a breakthrough. "It would be reasonable to expect that in the next six months, there should be more exploitation of the G20's potential to find solutions on quotas," he said. We need to hook up a G20 mechanism here. While Japan needs to be addressed, its bid to reflate the economy will not be a major part of the G20 agenda, Storchak said, and for now there are no plans to discuss it at all at the level of deputy finance ministers. The meeting's main task is to prepare the agenda for the G20 leaders' summit in St Petersburg on September 4-5, but finance ministers will also need to search for a new accord on reducing borrowing. A pledge at the 2010 summit in Toronto to halve budget deficits will expire this year, with most G20 nations falling short of the goal. "We will insist, we'll ask, we'll try to force it," Storchak, whose country balanced its budget last year thanks to high oil prices, said with a laugh. It would be strange if the G20 did not adopt new goals and guidelines on reducing budget deficits and debt levels. But that does not mean that decisions will be made already in Moscow. Russia's sovereign debts are low at around 10 percent of gross domestic product, and Moscow is keen to promote a supply-side agenda focusing on structural reforms, jobs and investment that reflects emerging nations' strategic priorities. Storchak suggested that a plan was taking shape to extend deadlines for debt and deficit reduction to five years from the current three. "We haven't discussed this subject yet, but it really cannot be excluded," he said. Reporting by Lidia Kelly; Editing by Douglas Busvine and Eric Walsh