* Euro rises to 2-week highs vs yen, sterling, Swiss franc
* Yen undermined by speculation of more BOJ easing
* Euro gains versus dollar but still stuck in range
* ECB seen leaving rates unchanged, Spain in focus
By Jessica Mortimer
LONDON, Oct 4 (Reuters) - The euro rose on Thursday, hitting two-week highs against the Japanese yen, the British pound and the Swiss franc before a European Central Bank policy meeting where rates are expected to be left on hold.
The yen was broadly weaker, dropping to a two-week low versus the dollar on wariness in case the Bank of Japan surprises on Friday by easing policy.
The euro rose as much as 0.5 percent to 101.82 yen on trading platform EBS, its strongest since Sept. 21, while the dollar hit 78.72 yen.
Market players were also cautious before the release of key U.S. jobs data on Friday, with analysts saying a stronger number may boost appetite for risk, helping the euro and weighing broadly on the safe-haven dollar.
“For the next 24 hours going into the BOJ meeting the yen is the weak link, while people are hesitant to put on long dollar positions ahead of U.S. non-farm payrolls data,” said Niels Christensen, currency strategist at Nordea in Copenhagen.
Expectations that Spain will soon apply for aid, triggering the ECB’s bond-buying plan under which it would buy bonds to bring down Spain’s borrowing costs, kept investors wary of selling the euro.
But it is uncertain when Spain will make the move and this has limited gains for the single currency.
The euro was up 0.3 percent against the dollar at $1.2942, staying comfortably above Monday’s low of $1.28035 and the 200-day moving average at $1.2823.
It also held below this week’s peak at $1.2968 and the mid-September high of $1.31729.
“Euro/dollar has been in a very tight range since early last week ... It’s very much wait-and-see with people looking to see whether the ECB and the payrolls report will be the trigger for more momentum in euro/dollar in either direction,” Nordea’s Christensen said.
It would need a move above $1.32 to trigger another round of short-covering in the euro, he added.
The ECB is expected to hold interest rates when it meets on Thursday to allow time for new details on the health of the euro zone economy and for Spain to ask for aid.
Also in focus on Thursday was a Spanish debt auction, where Madrid raised close to 4 billion euros ($5.2 billion) by selling three bonds maturing in 2014, 2015 and 2017. Yields fell from the previous auction though traders said not enough to boost the euro.
The euro rose to two week highs against the Swiss franc of 1.2136 francs on EBS and against sterling of 80.385 pence.
The dollar was broadly lower, with its index down 0.25 percent at 79.752. Data on Wednesday showed a larger-than-expected increase in private-sector jobs while investors also awaited the minutes of the Fed’s last policy meeting, where it decided on a new bond buying scheme.
The BOJ, which only last month boosted its asset-buying programme, has been under intense political pressure to offer more stimulus to spur growth and weaken the yen.
Analysts generally expect the BOJ to stand pat at the Oct. 4-5 meeting to gauge the effects of its latest easing, but pressure to ease further is expected to continue ahead of its next policy meeting on Oct 30.
Japan’s new Economics Minister Seiji Maehara will likely attend the Bank of Japan’s policy-setting meeting on Friday, a source familiar with the matter said.
“It may take a while before the BOJ will actually do something. Still, market players are speculating about more easing and you have to consider which side of position you should take under such conditions,” said Katsunori Kitakura, associate general manager of market making at Sumitomo Mitsui Trust Bank in Tokyo.
The Australian dollar fell to a 3 1/2-month low against the euro and was steady versus the dollar at $1.0211m having earlier dropped to a one-month low of $1.0182.
Data showed Australian retail sales edged up only marginally in August, adding to the case for further cuts in interest rates.