FOREX-Yen weakens broadly on easing bets; euro recovers

* Dollar climbs to four-month high, euro rallies vs yen

* Further yen losses may be limited, BOJ easing priced in

* Draghi speech to German lawmakers lifts euro

LONDON, Oct 25 (Reuters) - The dollar hit a four-month high against the yen on Thursday as expectations of more monetary easing from the Bank of Japan kept the Japanese currency under broad pressure.

The euro also rose against the yen, helped by European Central Bank President Mario Draghi's robust defence of his bond-buying plan before German lawmakers.

Growing speculation that the BOJ will unveil further monetary stimulus at its policy meeting on Oct. 30 to help the export-focused economy through a global slowdown has weighed on the yen in recent sessions.

The dollar climbed to 80.195 yen on trading platform EBS, its highest since June 25, with a trader for a European bank in Tokyo citing buying by hedge funds.

Some strategists said the dollar may struggle for further gains, however. With expectations of BOJ easing running high, the yen was unlikely to fall sharply even if policymakers do opt for more stimulus.

``Any kind of news in favour of an easing step is increasing yen selling. But I would be sceptical of the depreciation of the yen being sustained much beyond the monetary policy meeting itself,'' said Derek Halpenny, European head of currency research at Bank of Tokyo-Mitsubishi.

He did not expect the dollar to break 81 yen, and traders cited exporter offers above 80 yen.

However, falls in the dollar were expected to be limited after a recent upbeat U.S. economic data helped lift Treasury yields. U.S. initial jobless claims and durable goods orders numbers due later in the day will be closely watched for further clues to the health of the economy.

The U.S. Federal Reserve stuck on Wednesday to its plan to keep stimulating growth until the job market improves but acknowledged some parts of the economy were looking a bit better. The outcome was in line with market expectations and contained no surprises.


The euro rose 0.7 percent to 104.30 yen, near a 5-1/2 month high of 104.59 yen hit earlier in the week.

The single currency climbed 0.3 percent to $1.3011. It hit a one-week low of $1.29205 hit on Wednesday after weak German business activity data and a gloomy sentiment survey fuelled concerns the euro zone's largest economy was slipping into recession.

Strategists said Draghi's speech to the German parliament on Wednesday helped lift the euro.

Last month the ECB unveiled a plan to buy the bonds of indebted euro sovereigns if they request financial aid. That helped lower peripheral yields but drew criticism from some policymakers in Germany.

``It entails that he (Draghi) is committed to what he is saying, and that some of the tail risk has been removed from the euro,'' said Arne Rasmussen, head of FX research.

Expectations Spain will ask for a bailout, enabling the ECB to buy its bonds, have supported the euro in recent weeks. But uncertainty about the timing has made investors wary of pushing the euro out of the $1.28 to $1.3170 range it has traded in since mid-September.

The single currency hit a 3-1/2 month high against the Swedish crown of 8.6985 crowns after the Riksbank lowered its interest rate path following a run of gloomy economic data.

Sterling hit a one-week high against the dollar of $1.6129 after stonger-than-expected third quarter UK GDP data showed the country had emerged from recession.

The New Zealand dollar was boosted by less-dovish-than-expected comments from the New Zealand central bank, rising around 0.5 percent to US$0.8240 and pulling away from a six-week low of US$0.8100 hit earlier in the week.

Policymakers kept rates unchanged and reiterated expectations for inflation to head back towards the middle of its 1-3 percent target range.