FOREX-Dollar falls broadly after Obama heads for re-election
* Obama seen supportive of Federal Reserve's QE
* Congress still divided, raising risk of paralysis over fiscal cliff
* Euro bounces back from lows ahead of Greece parliament vote
TOKYO, Nov 7 (Reuters) - The dollar fell broadly in Asia on Wednesday as media projected U.S. President Barack Obama won a closely-fought election, ensuring that the Federal Reserve's quantitative easing will be in place.
The Democrats look set to retain a majority in the Senate while the Republicans also appear to be solidifying their control of the House of Representatives, keeping intact the risk of policy paralysis over the looming "fiscal cliff" -- a sharp fiscal tightening due to start next year.
"The Fed's quantitative easing is essentially a policy to cheapen the dollar. Republicans have been criticising the policy but it seems like that policy is likely to stay," said Yunosuke Ikeda, senior forex strategist at Nomura Securities.
The dollar fell to as low as 79.81 yen, nearly a full yen below its four-month high of 80.68 yen hit last week, before bouncing back slightly to 80.14 yen, still down 0.3 percent on the day.
An immediate support is seen at 79.275 yen, a low hit on Oct. 30 right after the Bank of Japan's easing.
The dollar's drop came as the 10-year U.S. Treasuries yield dropped seven basis points to as low as 1.68 percent .
On top of Obama's support for quantitative easing, which Romney and many Republicans are opposed as a dangerous intervention that could stoke inflation, Obama's tougher stance on financial regulations is viewed as positive for bonds and negative for stocks.
"After the election, the market will likely shift its focus to the fiscal cliff. It's not clear what Obama can achieve (to reduce the impact of the fiscal cliff)," said Junya Tanase, chief FX strategist at JPMorgan Chase.
About $600 billion in government spending cuts and higher taxes will kick in early next year, unless U.S. lawmakers take steps to mitigate their impact.
While analysts think some sort of a compromise can be reached by the end of the year between the two parties, investors are worried about a repeat of a major showdown last year that led to downgrade of the U.S. credit rating.
The dollar's index against a basket of major currencies fell 0.3 percent to 80.352, slipping further from Monday's two-month high of 80.843.
The euro rose 0.4 percent to $1.2862, bouncing back from a two-month low of $1.2763 hit on Tuesday partly on nervousness ahead of a parliamentary vote in Greece on the country's austerity reforms needed to secure international aid.
Greece's coalition government hopes to overcome its own divisions to push through the austerity package needed to avert bankruptcy in the parliament on Wednesday.
While Prime Minister Antonis Samaras is expected to narrowly win support for the cocktail of budget cuts, tax hikes and labour reforms, the smallest party in his coalition will oppose the measures, leaving him with a margin of just a handful of votes.
The euro had earlier this week broken below its 200-day moving average, but it has managed to cling around that level, at $1.28267 on Wednesday, in a sign investors' fear of a major crisis in the euro zone has subsided after the European Central Bank introduced a scheme to buy bonds of crisis-hit countries.
"The market no longer worries about the euro zone's break-up. The euro is under pressure but that would be a normal currency depreciation due to poor economic performance," said Nomura's Ikeda, adding that the euro will move in a rough $1.25-$1.30 range.
The Australian dollar also gained 0.2 percent to hit a fresh six-week high of $1.0461, extending its gains made after the Reserve Bank of Australia surprised some market players by not cutting rates on Tuesday.