London - Emerging stocks hit one-week highs and most emerging European currencies rallied on Wednesday as investors became less anxious about global currency wars, and Hungary's assets gained after the country issued bumper-sized dollar bonds.

Investors have worried that emerging economies will suffer as developed markets, most recently Japan, race to weaken their currencies to encourage exports.

G20 finance ministers and central bankers meet in Moscow on Friday and Saturday.

The yen rose, however, after a G7 official said late on Tuesday the group's statement earlier that day was meant to signal concerns about excessive yen moves.

Rising inflation in countries like Russia and Turkey may also affect policymakers' views on currencies, said Carlin Doyle, emerging markets strategist at State Street.

“I wonder if the G20 will quietly drop the issue of currency wars because a lot of central banks realize that inflation is beginning to pick up and strong currencies are actually doing their work to combat that,” he said.

The MSCI emerging equities index rose half a percent to a one-week high, recovering from recent four-week lows. China, the largest component of the index, was shut for New Year holidays.

Hungarian stocks hit one-week highs and the Hungarian forint hit one-month highs after Hungary issued five- and 10-year dollar bonds totalling $3.25 billion on Tuesday, which the country's debt agency said were nearly four times oversubscribed.

Hungary is seeking to borrow a total of 4 to 5 billion euros on international markets this year to refinance maturing debt.

Central Europe's most indebted nation is without a financing backstop after loan talks with the International Monetary Fund and European Union collapsed last year.

Romania is also holding an investor roadshow this week, and one fund manager said a $1-1.5 billion 10-year bond could follow, while a Belarus roadshow last week is likely to result in a $1 billion bond with maturity of 5-7 years, according to another fund manager.

The Egyptian pound fell to fresh record lows after ratings agency Moody's cut the country's credit rating to B3 with negative outlook on Tuesday, citing doubts about Egypt's ability to secure IMF support and the economic impact of a new round of political unrest. - Reuters