* Euro on track for best day in two weeks * Rehn says Spain has taken effective action for 2012, 2013 * Japan PM Noda open to dissolving parliament on Friday * Fed minutes due later on Wednesday By Gertrude Chavez-Dreyfuss NEW YORK, Nov 14 (Reuters) - The euro was on track to post its largest daily gain in two weeks against the U.S. dollar on Wednesday, after five losing sessions, on expectations Greece may receive another round of financial aid soon. The yen, on the other hand, fell sharply against the dollar and euro after Japanese Prime Minister Yoshihiko Noda said he was ready to dissolve the lower house of parliament later this week and hold a snap election next month. The euro had pared its losses on Tuesday on news Greece may receive aid worth roughly 44 billion euros ($55.93 billion) in a single tranche, a proposal made by Germany and discussed at a meeting of European Union finance leaders. That was viewed as positive for the euro because the mere fact that Germany made the proposal suggested that it was eager and willing to resolve the Greece's debt crisis. But for Greece to receive financial aid, international lenders must reach a broader agreement on the sustainability of Greece's debt, which is likely to check the euro's gains. The euro was also supported by comments from European Union Economic and Monetary Affairs Commissioner Olli Rehn who effectively endorsed Spain's austerity measures to cut its deficit in 2012 and 2013, although steps for 2014 fell short of what was expected by the group's finance ministers. "Overall, Rehn's comments were a credible and positive spin on Spain," said Sebastien Galy, currency strategist at Societe Generale in New York. "But unfortunately that positive spin on Spain is not translating to a rally in other riskier currencies such as the Aussie dollar." The yen, meanwhile, was the biggest mover of the day, notching losses of more than 1.0 percent against the dollar and euro as hedge funds and long-term investors sold the Japanese currency. The main opposition Liberal Democratic Party (LDP), which favors further monetary policy easing by the central bank of Japan, leads in opinion polls and the prospect of an early election is regarded as negative for the yen. LDP leader Shinzo Abe called on the central bank on Wednesday to print "unlimited yen" to achieve a new inflation target. Japanese PM Noda also told parliament he would be willing to dissolve the lower house on Nov. 16 and hold elections in December if the opposition agreed to pass reforms to the electoral system. Against the yen, the dollar rose more than 1.0 percent to 80.18 yen and the euro climbed 1.4 percent to 102.18 yen . The euro also rose 0.3 percent against the dollar to 1.2741 . It pared gains after weak economic U.S. data, denting the market's appetite for some of higher-risk currencies. U.S. retail sales fell in October, while producer prices unexpectedly weakened last month. "This morning's economic reports paint a picture of a slow and struggling U.S. recovery that will require continued stimulus from the Federal Reserve," said Kathy Lien, managing director of FX strategy at BK Asset Management in New York. THE FED AND THE DOLLAR The yen aside, the U.S. dollar eased against most major currencies, including the Swiss franc, on growing signs the Federal Reserve is likely to adopt an ultra-loose monetary stance in coming months. The Fed's influential Vice Chair Janet Yellen said on Tuesday U.S. interest rates may need to stay near zero until early 2016 to forcefully boost employment. The minutes from the latest Federal Open Market Committee meeting will be released later on Wednesday and are likely to confirm an easy policy bias for some time to come. That should limit the dollar's recent gains. The dollar index was flat on the day to 81.086, having hit a two-month high of 81.241 on Tuesday. Sterling hit a more than two-month low against the dollar of $1.5839 after the Bank of England's inflation report painted a gloomy outlook for the UK economy and governor Mervyn King said quantitative easing could still be restarted. The pound was last down 0.1 percent at $1.5852.