* Europe fiscal woes to be on G20 agenda - Japan finmin
* G20 also likely to discuss financial regulation - Kan (Adds background)
By Hideyuki Sano
TOKYO, May 28 (Reuters) - Japan expects Group of 20 finance leaders to discuss Europe's debt problems and how they are affecting currency markets, Finance Minister Naoto Kan said on Thursday.
The euro fell to a four-year low against the dollar and an 8-½ year low versus the yen this month as investors dumped the currency on worries about Europe's public finances. It has bounced back somewhat but the rebound lacks strength on persistent worries about the region's debt woes.
"Depending on the countries, there will be some interest in currency issues," Kan told a news conference. "I expect the G20 to discuss how the situation in Europe is affecting currencies."
G20 policymakers will meet on June 4-5 in the South Korean port city of Busan to lay the groundwork for a summit of G20 leaders in Toronto on June 26-27.
"Europe's problems are affecting other countries through exports to Europe. So that's going to be a major topic," said Kan, who plans to attend the G20 gathering.
Japan views the euro's falls against the yen as unlikely to severely hurt exports as shipments to Europe make up only about 10 percent of total Japanese exports to the world.
Still, the euro's weakness is unwelcome news for many Japanese exporters, who have set their currency assumption rates for euro/yen at 120-125 yen for the year to March. That is much higher than the euro's current levels around 111 yen.
Japanese policymakers worry that if the market turmoil stemming from Europe's debt problems persist, it may hurt business sentiment and affect the country's fragile and export-reliant recovery.
Kan also said financial regulation will also be a major topic at the G20 meeting, Kan said, although he did not elaborate on Japan's stance on the issue.
The Group of 20 developing and developed economies agreed last year to toughen global banking rules to make another meltdown less likely, focusing on capital and leverage standards.
The United States and EU countries favour new bank taxes and want them to be global. But countries whose banks did not come close to collapse -- such as Canada, Australia and most emerging economies -- are opposed.
Japan has said there is no need for it to take such additional steps as it has already introduced a similar scheme called a deposit insurance system. (Writing by Leika Kihara; Editing by Chris Gallagher)