* 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 Singapore.
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 Reuters survey.
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