FOREX-Yen eases from 1-week high, euro firm on U.S. fiscal hopes
* Boehner's comments boost risk appetite
* Dollar/yen supported by speculation of month-end bids
* Euro holds steady above Wednesday's low
TOKYO, Nov 29 (Reuters) - The yen held steady below a one-week high versus the dollar on Thursday, while the euro found some support as comments from U.S. policymakers rekindled hopes of a deal to avert a sharp fiscal tightening.
"For the moment, the U.S. fiscal cliff seems to be a dominant theme in the market," said Katsunori Kitakura, associate general manager of market-making at Sumitomo Mitsui Trust Bank.
U.S. House Speaker John Boehner, the top Republican in Congress, voiced optimism that Republicans could broker a deal with the White House to avert a fiscal crisis, even though he repeated his opposition to raising income tax rates on high earners.
President Barack Obama said on Wednesday he hoped to reach an agreement with Congress before Christmas.
Investors fear the planned tax increases and spending cuts due to start at the beginning of next year totalling about $600 billion could tip the world's biggest economy into recession and depress the global economic outlook.
The dollar held steady versus the yen from late U.S. trade on Wednesday at 82.08 yen, having bounced from Wednesday's one-week low of 81.68 yen.
Expectations of big month-end dollar/yen bids helped lend support to the dollar, which had been in a corrective decline after hitting a 7 1/2-month high of 82.84 yen last week.
The yen has come under pressure over the past couple of weeks due to market speculation about the chances of aggressive monetary easing in Japan following a likely change in government next month.
Main opposition leader Shinzo Abe, a front-runner to become prime minister after the Dec. 16 election, has called for radical change in monetary policy, including unlimited easing, sparking a four-percent fall in the yen earlier this month.
The dollar is likely to trade in a 81.00 yen to 83.00 yen range ahead of Japan's election, said a trader for a Japanese bank in Singapore.
"Dollar/yen continuing to see some short-term players building on longs," the trader said, adding that most market players he had contact with were expecting that sort of range for now.
The euro traded at about $1.2953, steady from late U.S. levels and above Wednesday's low of $1.2880, supported by improved risk appetite due to revived optimism over the U.S. fiscal cliff negotiations.
Market players, however, remain concerned about some elements of the latest aid deal for Greece, agreed by euro zone finance ministers and the International Monetary Fund earlier this week, with one looming issue being whether Greece can successfully implement a debt buy-back.
Still, a positive technical sign for the euro is the bullish hammer pattern on candlestick charts that its bounce from Wednesday's trough has produced.
A drop in the 10-year Italian government bond yield to its lowest level since February 2011 on Wednesday was another supportive factor for the euro, as it suggests that investor jitters over the euro zone's sovereign debt crisis are diminishing.
The single currency faces resistance from the daily Ichimoku cloud top around $1.2994 but a break there could open the way for the euro to test a four-week high of $1.3010 hit on Tuesday after Greece's international lenders agreed to unblock aid funds to Greece.
Against the yen, the euro changed hands at 106.33 yen , flat on the day and not far from a seven-month high of 107.135 yen hit on Monday.