* Prospects for Greek aid deal limits euro losses * Lenders to meet again next Monday to seek agreement * Dollar hits 7-1/2 month high vs yen, breaks above 82 yen * Euro crosses 105 yen for first time since early May By Gertrude Chavez-Dreyfuss NEW YORK, Nov 21 (Reuters) - The euro hit its highest in more than six months against the yen and trimmed losses versus the dollar in volatile trading on Wednesday as investors focused on the progress being made by European leaders to reach an agreement on Greek funding. Europe's common currency dropped earlier after Greece's international lenders failed to reach agreement on releasing emergency aid as they haggled over how to reduce the country's debt to a sustainable level. But the euro later trimmed losses after German Chancellor Angela Merkel said she saw chances of a deal at a meeting of European finance ministers on Monday. "Perhaps the most important take-away from the failed talks was that it appears to have spurred a tactical shift by Germany," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York. "It seems more determined than it has been in making sure that the Athens program remains intact." The yen, meanwhile, fell across the board on weak Japanese export data and expectations of further monetary easing from the Bank of Japan. It fell to a 6-1/2 month low against the euro and a 7-1/2 month trough versus the dollar on Friday. In early New York trading, the euro climbed to a peak of 105.82 yen, its highest since early May. It was last at 105.54 yen , up 0.8 percent. Against the dollar, the euro was flat at $1.2814, off a session low of $1.2736. Camilla Sutton, chief currency strategist, at Scotia Capital in Toronto said the euro stands to benefit should there be position-squaring leading into the U.S. holiday weekend as the market is currently short the single euro zone currency. Markets are closed on Thursday due to the U.S. Thanksgiving holiday. Sutton expects the euro to trade in narrow ranges in the near term, closing the year around $1.27 and trending lower in 2013, possibly closing at $1.25. The single currency has also been under pressure from recent economic data showing the euro zone is in recession and from uncertainty over Spain. Madrid has not yet requested the financial aid many in markets think it needs and the country faces a secessionist threat in a regional election on Sunday in Catalonia. YEN STUMBLES The dollar rose as high 82.53 yen, its strongest level since early April as the main opposition Liberal Democratic Party, tipped to win in a parliamentary election next month, pledged to push for further easing by the BOJ. It last traded at 82.31, up 0.8 percent. The dollar broke through reported options barrier at 82 yen, triggering stop-loss orders. It was the dollar's sixth consecutive day of gains against the yen The yen was also hurt by data showing Japanese exports declined for a fifth month in succession, fanning concern the country may be slipping into recession. "The obvious target on the upside is the 84 yen level, the high set in February this year. That is certainly feasible now given the moves we have had in recent days," said Derek Halpenny, European head of global currency research at Bank of Tokyo Mitsubishi. The Australian dollar also rose to a 7-1/2 month high of 85.42 yen. It last changed hands at 85.28, up 0.5 percent.