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FOREX-Yen weakens towards four-month lows versus dollar

* Yen dips on worries about Japanese economy, importer selling

* Euro still hobbled by uncertainty over Spain, Greece

* U.S. jobs data, election in focus

LONDON, Nov 1 (Reuters) - The yen fell against the dollar on Thursday, edging closer to a four-month low as investors took an increasingly grim view of the Japanese economy and as importers sold the currency.

Traders said many investors were seeking to buy the dollar on dips, targeting a rise to 83-84 yen in the coming months as bets grow that the Bank of Japan will have to take additional monetary easing measures to fight off deflation.

Recent Japanese data, and most corporate earning reports, have been soft. Third-quarter gross domestic product, due on Nov. 11, is also likely to contract -- all of which would see the yen cede ground, strategists said.

Besides, Japan faces its own mini fiscal cliff, although the government is ready to strike a deal with the opposition to pass a critical bill needed to prevent a severe funding squeeze. .

The dollar touched a high of 80.13 yen and inched towards the four-month high of 80.38 struck last Friday. It last stood at 80 yen, up 0.3 percent on the day.

``We are long dollar/yen because the data out of Japan, the corporate earnings, have all been pretty weak and will put pressure on the BOJ to ease,'' said Stuart Frost, head of Absolute Returns and Currency at fund managers RWC Partners.

``We will look to buy on dips, targeting a rise to 80.60 yen. It will be an eventual grind higher towards 84.''

The yen had risen on Tuesday after the BOJ increased its asset purchase programme by 11 trillion yen, a move that was roughly in line with market expectations.

That disappointed some investors who had positioned for a bigger increase and drove them to pare their long dollar/short yen positions.

``The BOJ's latest stance is quite aggressive as it plans to keep easy policy until deflation ends, thus likely to keep the dollar supported,'' said Minori Uchida, chief FX strategist at the Bank of Tokyo-Mitsubishi UFJ.

Traders said the catalyst for the latest gains were large bids from a Japanese importer.

Analysts said corporate currency flows tend to favour the dollar these days because of Japan's trade deficit -- a change from just a few years ago when exporters' yen buying dwarfed importers' yen selling.

Nonetheless, dollar offers from Japanese exporters above the four-month high suggest further gains for the U.S. currency are likely to depend on U.S. payrolls data on Friday revealing strong jobs growth.

ELECTION

The U.S. presidential election on Nov. 6 was also in focus. Some in markets say victory for Republican candidate Mitt Romney could lift the dollar. He has opposed the Federal Reserve's bond buying programme, which has pushed yields lower, so if he won Treasuries could sell off, driving yields and the dollar higher.

But analysts say results of Congressional elections could be equally important, as Congress will have to deal with the so-called fiscal cliff -- up to $600 billion in expiring tax cuts and spending reduction that is set to kick in next year -- which threatens to hurt the U.S. economy.

The dollar's gains saw the euro ease to $1.2940, slightly lower than its New York close on Wednesday, having again failed to stay above $1.3000.

Uncertainty about if and when Spain will seek a bailout and trigger European Central Bank's bond-buying, and whether Greece will secure more emergency loans, still dog the single currency.