* Euro at two-week highs vs yen, sterling, Swiss franc
* Yen undermined by speculation of more BOJ easing
* ECB leaves rates unchanged at 0.75 pct, Spain in focus
By Nia Williams
LONDON, Oct 4 (Reuters) - The euro rose on Thursday, helped by the European Central Bank keeping interest rates unchanged, and looked likely to hold firm on expectations Spain was edging closer to a bailout.
Players were expecting few surprises from ECB President Mario Draghi's news conference at 1230 GMT after the central bank held rates at 0.75 percent.
Anticipation that Spain will ask for a bailout and trigger the ECB's bond-buying plan has made investors wary of selling the euro although uncertainty about when such a request could come has limited the currency's gains.
The euro rose 0.4 percent to $1.2968, testing the top of its recent $1.2800-$1.2970 range. Strong support was cited around the 200-day moving average at $1.2823.
"Draghi is probably going to reiterate that the ball is in the politicians' court. But I do not think that would be a great surprise. What is key for euro/dollar going forward is going to be Spain," said Michael Sneyd, FX strategist at BNP Paribas.
Sneyd said he expected U.S. non-farm payrolls data on Friday to have a bigger impact than the ECB. While a stronger number may boost appetite for risk, helping the euro and weighing broadly on the safe-haven dollar, the U.S. unit could also slide if weak data fuelled concern about the U.S. economy.
Also in focus on Thursday was a debt auction at which Spain raised 4 billion euros ($5.2 billion) selling tranches of 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 a two-week high against the Swiss franc at 1.2136 and a two-week peak against the pound at 80.40 pence.
The pound edged slightly higher against the dollar to $1.6115 after the Bank of England kept rates and its quantitative easing total on hold as expected.
The dollar index dipped 0.25 percent to 79.75. Data on Wednesday showed a larger-than-expected increase in private-sector jobs. Investors awaited the minutes of the Fed's last policy meeting at which it decided on a new bond-buying scheme.
The yen was broadly weaker, dropping to a two-week low versus the dollar, with investors wary the Bank of Japan may surprise on Friday by easing policy.
The euro rose as much as 0.6 percent to 101.94 yen on trading platform EBS, its strongest since Sept. 21, while the dollar hit 78.72 yen.
"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.
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.
The BOJ was expected to stand pat at its Oct. 4-5 meeting to gauge the effects of its latest easing. Pressure to ease further was expected to continue ahead of its Oct. 30 policy meeting.
The Australian dollar fell to a 3-1/2-month low against the euro and was steady versus the dollar at $1.0216 having earlier dropped to a one-month low of $1.0182.
Data showed Australian retail sales rose 0.2 percent in August, missing expectations and adding to the case for further cuts in interest rates.