* Euro climbs after Spanish regional election results
* Uncertainty over when Spain will request bailout caps gains
* Yen hits 3-month low versus dollar on BoJ easing expectations
By Nia Williams
LONDON, Oct 22 (Reuters) - The euro rose against the dollar and hit a 5-1/2 month high against the yen on Monday after a victory for Spain's prime minister in regional elections removed a potential obstacle to him asking for a bailout.
Comments from European Central Bank policymaker Joerg Asmussen, reiterating the bank's commitment to do everything in its power to show the euro is irreversible, also lifted demand for the shared currency.
The euro rose 0.4 percent on the day to $1.3067, with resistance expected around $1.3140, the Oct. 17 high. Traders reported talk of a large $1.3050 options expiry that could keep it pinned close to that level.
"There is a little bit of relief the regional elections which we had over the weekend in Spain passed off okay and that takes us one step closer to Spain asking for a formal bailout. I think the market is trading on that expectation that it will happen at some point," said Tom Levinson, FX strategist at ING.
Spanish Prime Minister Mariano Rajoy's People's Party secured victory in his home region of Galicia, boosting his austerity drive.
Expectations that Spain will apply for a bailout, prompting the European Central Bank to start buying its bonds, have helped support the euro in recent weeks, although uncertainty over the timing of such a move was also seen limiting its gains.
"A lack of negative news out of Europe should help the euro for the moment at least," said Richard Falkenhall, currency strategist at SEB in Stockholm.
He said the euro could rise to $1.34 or $1.35 over the coming weeks, adding the U.S. presidential election and the country's looming 'fiscal cliff' of budget cuts and tax hikes could switch the market's attention towards the United States and away from the euro zone.
YEN FALLS
The yen fell broadly after data showing Japan's exports tumbled in September added to growing expectations of more policy stimulus from the Bank of Japan when it meets next week.
The euro rose more than 1 percent versus the yen to a 5-1/2 month high of 104.40 yen.
The dollar rose around 0.7 percent to 79.85 yen, its strongest since mid-July, gaining momentum after breaching resistance at its 200-day moving average around 76.42 yen.
Strategists said the yen could rebound strongly next week if the BoJ disappoints expectations and keeps policy on hold. Societe Generale analyst Sebastien Galy recommended paring long dollar/yen positions and maintaining a strategy of buying the dollar on dips.
The Canadian dollar also fell, sliding to a two-month low of C$0.9949 against the U.S. dollar as the market positioned for the prospect of a more dovish tone from the Bank of Canada at its rate setting meeting on Tuesday.
In addition, weekly data showed speculators' net long positions in the Canadian dollar are the biggest among major currencies, at about 9.5 billion U.S. dollars, leaving the Canadian unit vulnerable to profit-taking.
The Australian dollar recovered from a session low of US$1.0301, hit after the government reaffirmed its commitment to deliver a budget surplus, reinforcing views that a more frugal public sector will give the central bank reason to cut interest rates further.
The Australian dollar was last trading close to flat on the day at US$1.0331.
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