* Euro falls to 1-week low versus dollar
* Spanish debt yields rise as Moody's downgrades 5 regions
* Yen under pressure on BoJ speculation
* Canadian dollar rises after BoC announcement
NEW YORK, Oct 23 (Reuters) - The euro plunged versus the yen and hit a one-week low versus the dollar on Tuesday as concerns about a global economic slowdown and a spike in Spain's borrowing costs spurred broad-based risk aversion.
The euro is up about 0.9 percent against the dollar in October, but its u pside i s widely seen as limited given t he unresolved three-year debt crisis a nd mounting evidence that global economic growth is sputtering.
Poor earnings from major mult i national U.S. companies confirmed fears a bout g lobal growth, sending stocks sharply lower. A top European share index slid to its lowest level in more than one and a half months.
The borrowing costs of Spain, which is under pressure to seek a sovereign bailout, rose after credit rating agency Moody's downgraded five Spanish regions.
Meanwhile, d ata showed business morale in France's manufacturing sector slumped to its lowest level in over two years. 1/8I D:nL5E8LN2N3 3/8
The French data fueled fears that the euro zone's second largest economy may be on the brink of a recession, according to Joe Manimbo, senior market analyst, Western Union Business Solutions in Washington D.C.
``But despite the latest flare up in worries about debt and growth in the euro region, the single currency may see its downside somewhat cushioned by expectations Spain may be weeks away from requesting an international bailout, allowing the country to tap the ECB's bond buying program to bring meaningful debt relief,'' he said.
The euro fell as low as $1.295 0 , its lowest since Oct. 16. I t last traded at $1.2964, down 0.7 percent on the day. The currency remains within the $1.28 to $1.3170 range it has traded in since mid-September.
The euro has strengthened recently on speculation that Spain will request aid, enabling the European Central Bank to buy its bonds. The euro's gains, however, have been limited due to uncertainty over when Spain will act.
Looking ahead, initial readings of euro zone PMI data and a German Ifo business sentiment survey on Wednesday will be closely watched for signs of how the currency bloc is holding up.
The yen remained vulnerable on expectations that the Bank of Japan will ease monetary policy at its Oct. 30 meeting.
The yen earlier in the global session hit a three-month low against the dollar and a five-month trough versus the euro on expectations that the Bank of Japan will further loosen policy later this month.
The dollar, however, later pared gains and fell for the first day in nine sessions against the yen to last trade at 79 .78 < JPY=>, down 0.2 p ercent on the day.
The Japanese currency recovered, coming off its lows after Finance Minister Koriki Jojima denied a report that the government is asking the central bank to raise asset purchases by 20 trillion yen ($251 billion) to boost economic growth.
Against the yen, the euro last traded at 103.42, d own 0.9 percent.
``The market is a bit fixated on this meeting next Tuesday and no one wants to stand in front of a freight train,'' said Steven Saywell, head of FX strategy at BNP Paribas.
``There's potential for disappointment. We are looking for opportunities to sell rather than chase the dollar higher.''
Elsewhere, the U.S. dollar rose against the Canadian dollar despite the Bank of Canada announcing it will likely have to raise interest rates over time.
``Despite some mild softening in its tone, the central bank has largely retained its tightening bias, in contrast to market expectations which generally expected a switch to a neutral stance,'' said Vassili Serebriakov, currency strategist at Wells Fargo in New York.
``Acknowledging that near-term Canadian dollar upside may be limited by to overextended speculative positioning, we nevertheless see the Bank of Canada's relative hawkishness as a key driver of further Canadian dollar gains in the coming months and quarters,'' he said.
The U.S. dollar last traded 0. 2 percent higher at C$0.99 34 , according to Reuters data.