* Euro firm near 6-week highs vs dollar * Common currency faces resistance near $1.3244 * Dlr/yen touches 3-mth low, Azumi warns about speculation By Anirban Nag LONDON, Jan 31 (Reuters) - The euro rose against the dollar on Tuesday, supported by expectations of a Greek debt restructuring deal that would help the country avoid a messy default while a resurgent yen kept alive the risk of intervention by Japanese authorities. The dollar extended its recent losses against the yen and hit a three-month low, under pressure after the U.S. Federal Reserve said last week it was likely to keep interest rates near zero at least until late 2014. The euro got a lift after Greek Prime Minister Lucas Papademos said negotiators had made "significant progress" in talks to strike a restructuring deal on government debt, with the aim of a definitive agreement by the end of this week. The common currency was up 0.4 percent to $1.3180 , edging towards a six-week high of $1.3235 hit last week on trading platform EBS. The euro faces resistance at that level and also near $1.3244, the 38.2 percent retracement of the euro's October to January slide. "I don't think the euro will hold on to gains above $1.3200-1.3250 as investors are not keen to squeeze out euro shorts," said Sebastien Galy, FX strategist, at Societe Generale. "The market is currently keeping aside the various risk factors like the possibility of a Portuguese debt restructuring on hopes of more liquidity injection by major central banks." Apart from the U.S. Federal Reserve keeping the door open for more quantitative easing, expectations are rising that the European Central Bank could pump in a large amount of funds through the next long-term refinancing operation to be held later next month. A Reuters poll showed the ECB will allot 325 billion euros at the tender and this is likely to support riskier assets like stocks and commodities. A rise in global stock markets weighed down the U.S. dollar and lent support to the euro, traders said, adding there was also talk of the potential for dollar-selling related to month-end portfolio adjustments. Analysts said while an agreement to avoid a disorderly Greek default would lift sentiment in the short term, the risk of contagion ensnaring the euro zone's larger economies will keep investors' bearish about the euro in the medium term. Worries that a similar debt restructuring in Portugal continue to mount, with the yield on the 10-year Portuguese government bond rising to over 17 percent and their price now trading almost 60 percent below face value. INTERVENTION JITTERS The dollar was broadly under pressure and was down 0.3 percent against a basket of currencies at 78.903. Against the yen, the dollar hit a three-month low of 76.175 yen on trading platform EBS at one point, well below last week's high of 78.288 yen, with traders saying the dollar dipped as some market players trimmed their long positions. Japanese Finance Minister Jun Azumi vowed to take firm steps against excess volatility and speculative moves in the foreign exchange market to curb any renewed rises in the Japanese currency. But strategists at Morgan Stanley reckoned the flows were far from speculative. They said the latest demand for yen was from Japan's institutional investors off-loading the FX risk of their $2.6 trillion foreign bond holdings. "Japanese-based investors have hedged about $1.6 trillion of these holdings. As long as hedging costs stay low, we believe that these investors will continue to off-load FX risks, keeping yen strong," they said in a note. As such, not many expect yen-selling intervention by Japanese authorities at this point, although market wariness is likely to increase if the dollar drops down to around 75 yen. A trader in Singapore said there was talk of dollar bids down towards 76.00 yen, but added that there was talk of stop-loss dollar offers at levels below 75.80 yen or so. Some traders say Japanese authorities may be hesitant to intervene unless the dollar hits a record low versus the yen, after the U.S. Treasury last month expressed disapproval over Japan's solo intervention in October.

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