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FOREX-Yen falls as economic outlook darkens, US data in focus

* Yen dips on worries about Japan, importer selling

* U.S. jobs and manufacturing activity data in focus

* Euro still plagued by uncertainty over Spain, Greece

LONDON, Nov 1 (Reuters) - The yen slid against the dollar on Thursday, edging closer to a four-month low on the back of an increasingly grim outlook for the Japanese economy and importers selling the currency.

Traders said many investors were seeking to buy the dollar on any dip in its value, 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 and third-quarter gross domestic product, due on Nov. 11, is also likely to contract - all of which should see the yen cede ground, strategists said.

``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.''

While much attention has focused on government debt problems in the U.S. and Europe, Japan faces its own mini fiscal cliff, although the government is ready to strike a deal with the opposition to pass a critical bill 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.

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. 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.

U.S. IN FOCUS

The Institute for Supply Management's factory activity index and the ADP employment figures out of the U.S. later on Thursday could create some volatility in the dollar.

If the employment and manufacturing activity data disappointed the dollar could give up some of its recent gains.

``While today's U.S. data will probably have only a marginal impact on the dollar, an easing in the figures could still weigh on the currency,'' said Stephen Lewis, chief economist at Monument Securities.

He added non-farm payroll figures, the month's most high profile jobs report due on Friday, would have a greater impact on the dollar.

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 Fed'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 the 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 reductions that are set to kick in next year -- which threatens to hurt the U.S. economy.

A policy combination offered by the Republicans winning the White House and Senate, while retaining the House, will probably be the most positive for the dollar in the near term, according to a note from Dutch bank ING.

The dollar's gains saw the euro ease to $1.2945, 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 an international bailout and trigger European Central Bank bond-buying, and whether Greece will secure more emergency loans, still dog the single currency.