* Outlook for euro remains negative, dollar holds firm * Germany still opposed to euro bond, bigger ECB role * Dollar/yen supported after demand at Tokyo fixing By Masayuki Kitano SINGAPORE, Nov 25 (Reuters) - The euro dipped to a fresh seven-week low against the dollar on Friday, struggling to find any traction with markets seeing no end in sight for the euro zone debt crisis. The common currency has shed 1.5 percent so far this week, having come under pressure after lacklustre demand at a German bond auction on Wednesday stirred fears the debt crisis was starting to threaten even Europe's biggest economy. The euro hit a seven-week low of $1.3298 on Friday, and market players are bracing for further weakness in coming months, although short-covering may slow the currency's descent and cause some swings in between. "It does appear that international asset managers are now pulling out of the euro zone... It hasn't been a panic, but there is an obvious trend," said Gareth Berry, G10 FX analyst for UBS in Singapore, adding that the euro could drop to $1.30 in the next two or three months. "Rather than reallocating within the euro zone, international asset managers are tending to pull out now. That's consistent with some of the flows we have been seeing," said Berry at UBS. The common currency last stood at $1.3305, down 0.3 percent on the day. The next major trough on charts lies at $1.3145, a low hit in early October. The euro edged up 0.1 percent versus the yen to 103.00 yen, hovering close to its lowest in nearly seven weeks of around 102.71 yen hit on Thursday on trading platform EBS. Talks by the heads of Germany, France and Italy on Thursday were overshadowed by Germany's persistant opposition to a joint euro zone bond and a bigger role for the European Central Bank (ECB) to tackle the crisis. "Disappointment that officials continue to tinker with the trivial rather than consider the bold pushed risk appetites lower and increased the downside risks to the outlook for the European sovereign debt crisis," said Besa Deda, chief economist at St. George Bank in Sydney. The ongoing risk-off sentiment kept commodity currencies subdued, with the Australian dollar falling 0.3 percent to $0.9702, not far from a seven-week low of $0.9664 set earlier in the week. DOLLAR/YEN The dollar rose 0.4 percent against the yen to 77.41 yen, having gotten a lift from dollar demand at Tokyo's 0100 GMT fixing including dollar buying by Japanese importers, traders said. There was also talk of Asian currency buying versus the yen. The Thai baht rose 0.3 percent against the Japanese currency to 2.4706, with Asian currency traders saying the demand for baht/yen may be linked to insurance payments related to the Thai floods. A trader for a Japanese bank in Singapore said the dollar has recently been supported by demand from Japanese companies investing abroad. "The biggest factor has been the emergence of dollar buying flows such as those related to M&As... There have been flows out of Japan related to outward M&As and securities investment," he said, adding that such flows, have helped spur some dollar-short covering by hedge funds. A selloff in Japanese government bonds (JGBs) caught the attention of some FX traders and analysts, although the implications for the yen were not too clear cut. "Foreign investors are not large holders of yen assets. I don't think there's been much inflows into Japan looking for safe haven, except perhaps some of the larger sovereigns, and these are unlikely to turn around so quickly," said Rob Ryan, FX strategist for BNP Paribas in Singapore. JGB traders said there was talk that Japanese regional banks took profits in JGBs after their investment in bonds issued by Norwegian export credit finance company Eksportfinans turned sour as Moody's abruptly downgraded the company by seven notches to junk status earlier in the week.

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