* Dollar/yen at day's high, option barrier at 81.50 cited
* Dollar heads for best week vs yen since late June
* Euro under pressure as worries about Greece weigh
* ECB's Weidmann says Greece would have to earn haircut
By Julie Haviv
NEW YORK, Nov 16 (Reuters) - The yen fell for a third straight day against the dollar on Friday, on track for its worst weekly loss since mid-February as expectations of aggressive monetary easing from the Bank of Japan continued to curb the currency's appeal.
The dollar, up about 2.3 percent versus the yen on the week, remained in favor after Japanese Prime Minister Yoshihiko Noda paved the way for a snap election on Dec. 16. The lower house of parliament was dissolved on Friday.
Shinzo Abe, leader of the main opposition Liberal Democratic Party and seen as likely to be Japan's next leader, called o n Th ursday for the country's central bank to adopt interest rates of zero or below to spur lending.
The euro, meanwhile, continued its downward drift as concerns over Greece's debt struggle and Europe's stagnant economy weighed.
The dollar rose as high as 81.38 yen. It last traded at 81.36, up 0.3 percent on the day, according to Reuters data, with traders citing a large options barrier at 81.50 yen and stop-loss orders placed above it. The U.S. currency hit a 6-1/2-month high of 81.45 yen on Thursday, according to Reuters data.
Some analysts believe it could rise toward 82 yen if the Bank of Japan, which holds a policy meeting next week, indicates it could ease further.
Price action, however, was subdued compared with Wednesday and Thursday when the dollar rallied about 1.1 percent each day.
"We have had quite a big move in the last couple of days so we've probably seen a bulk of the early moves. The direction will continue trending higher in coming months," said Colin Asher, senior economist at Mizuho Corporate Bank.
"Some investors with short-term horizons are probably looking to take profits after such big moves and some of the longer-term investors are happy to sit on their positions on the expectations that the rise will continue."
The yen, seen as a safe haven in times of uncertainty, could pare losses should concerns about the U.S. "fiscal cliff" mount and euro zone debt concerns deepen. But the dollar should also benefit due to its safe-haven status.
The dollar/yen pair traditionally has a strong correlation with the spread between two-year U.S. Treasuries and Japanese government bond yields.
Short-dated Japanese bond yields have fallen sharply this week but so have U.S. Treasury yields on expectations of Federal Reserve easing and safe-haven flows into Treasuries due to worries about the U.S. budget impasse.
If Congress and the White House cannot reach a debt and deficit reduction deal by the end of the year it will unleash massive spending cuts and tax increases that some believe have the potential to tip the U.S. economy back into recession.
A protracted impasse in U.S. talks to avoid some of the $600 billion of spending cuts and tax hikes that kick in early in the new year could prompt some investors to seek shelter in the dollar.
Congressional leaders said their meeting with President Obama on Friday about the "fiscal cliff" was constructive.
Against the dollar, the euro fell for the first time in three sessions, last trading down 0.6 percent at $1.2708 but holding above Tuesday's two-month low of $1.2660.
At current prices the euro is flat on the week, but down 1.9 percent so far in November.
A dispute among Greece's international lenders and weak economic data out of the euro zone have done little to lift market sentiment toward the euro.
Any new reduction of Greece's debt should only come as a reward for Athens implementing the reforms it has signed up to, European Central Bank Governing Council member Jens Weidmann said on Friday.
Weidmann's fellow Governing Council member, Luc Coene, on Thursday became the first ECB policymaker to say that another haircut on part of Greece's debt was probable.
"We are in a bit of a consolidation mode today and we are not near breaking new lows," said Greg Anderson, G10 strategist at CitiFX, a division of Citigroup in New York.
"We still do not know if Spain will request a bailout, if Greece will receive more aid and if the U.S. will hit the 'fiscal cliff', so there is not a lot of appetite for risk and people are refraining from taking any bold new positions," he said.
The euro is expected to rally if news emerges that Spain is requesting aid because it will set the stage for the European Central Bank to start buying the country's bonds to lower its borrowing costs.
The euro last traded down 0.4 percent at 103.28 yen , according to Reuters data.