* Yen edges up from 7-month lows vs dollar and euro
* Euro helped by optimism of eventual Greece aid deal
By Masayuki Kitano
SINGAPORE, Nov 23 The yen clawed higher against
the dollar on Friday, getting some respite after having fallen
sharply over the past two weeks on expectations of more forceful
monetary easing in Japan.
The euro held steady against the dollar and hovered near the
previous day's three-week high, having gained a boost on
expectations that international lenders will soon reach a deal
to release the next tranche of aid for Greece.
The dollar eased 0.3 percent versus the yen to 82.19 yen
, pulling away from Thursday's 7-1/2-month high of 82.84
yen, the dollar's strongest level since early April.
The dollar has climbed roughly 3.4 percent against the yen
in the last two weeks, with the yen weakened by expectations
that a likely new Japanese government in December would push the
Bank of Japan to implement more drastic monetary stimulus.
Shinzo Abe, the leader of Japan's opposition Liberal
Democratic Party (LDP), which is tipped to win a general
election on Dec. 16, has called for measures such as having the
BOJ buy bonds issued specifically to fund public works projects
and pushing short-term interest rates below zero.
His party's policy platform calls for setting a 2 percent
inflation target, and seeks to ensure that the BOJ will pursue
it vigorously with a possible revision to legislation that
guarantees the central bank's independence.
With the central bank's independence having become a topic
issue in Japan ahead of the election, the yen still looks
vulnerable, said Rob Ryan, a strategist for RBS in Singapore.
"I think the LDP is going to have to continue to sound more
aggressive without sounding ridiculous," Ryan said. "So the
threat will always be there, ahead of the election that we get
comments that send the yen weaker."
The yen also regained ground against the Australian dollar
and the euro on Friday. The single currency dipped
0.2 percent versus the yen to 105.92 yen, pulling
away from a seven-month high of 106.585 yen struck on Thursday.
Against the dollar, the euro held steady at $1.2886,
staying within sight of Thursday's three-week high of $1.2899.
The euro has gained a boost after German Chancellor Angela
Merkel said on Wednesday that an agreement to release aid to
Athens was still possible next Monday.
Expectations for a deal on Greece on Monday, when the
country's international creditors will hold another round of
talks, have been buttressed further by comments from Olli Rehn,
the European commissioner for economic affairs.
Rehn said Greece has taken all the steps necessary to secure
its next tranche of aid and euro zone finance ministers should
be able to sign off definitively on the assistance on Monday.
Still, analysts said some caution may be in order, given
disagreements among Greece's international lenders.
"Eventually they will reach a deal, whether they reach a
deal on Monday remains questionable," said Callum Henderson,
global head of FX research for Standard Chartered Bank in
Germany has led resistance within the euro zone to calls
from the International Monetary Fund and others to accept losses
on their Greek debt holdings.
Later on Friday, the euro could take its cues from data on
German business morale. The Ifo business climate index, a key
barometer of economic health in Germany, is seen slipping to
99.5 in November, down from 100.0 last month, according to a