* Dlr hits 2-1/2 mth low vs euro after Fed slashes rates
* Dollar near 13-year lows vs yen
* Fed's historic rate cut seen keeping dollar weak
* BoJ seen cutting rates later in the week
(Adds quotes; changes byline, dateline, previous TOKYO)
By Jessica Mortimer
LONDON, Dec 17 (Reuters) - The dollar fell broadly on Wednesday, hitting a 2 1/2-month low against the euro and heading towards a 13-year low versus the yen after the Federal Reserve slashed interest rates to between zero and 0.25 percent.
The euro climbed as high as $1.4192 according to electronic trading platform EBS in Asian trade, after the Fed said it would use "all available tools" to support the economy from a recession after cutting the Fed funds rate from 1 percent to a record low.
It added that it was mulling possible purchases of longer-term U.S. Treasury debt and would consider other ways to tap its burgeoning balance sheet to support the economy..
The announcement triggered broad selling in the dollar, as the market had expected a smaller rate cut of 50 basis points. Analysts said the outlook for the greenback looked bleak going into the year-end, with repatriation flows seen drying up.
"The main trend going into Christmas and year-end will be one of dollar weakness," UBS currency analyst Geoff Kendrick said.
At 0855 GMT, the dollar had fallen 0.7 percent on the day to 88.21 yen, hovering close to a 13-year low of 88.10 yen hit on trading platform EBS last week.
The euro gained 0.2 percent against the dollar to $1.4126, not far off an earlier two-and-a-half month high of $1.4192 hit on EBS during Asian trade.
Yen gains versus the U.S. currency helped to push the euro down 0.5 percent to 124.82 yen.
FOCUS ON BOJ
The yen has risen sharply in recent months as investors unwound carry trades and fled out of riskier and higher-yielding assets.
The gains gathered pace, however, as the Fed's move brought the U.S. interest rates below the Bank of Japan's 0.30 percent target for the overnight call rate for the first time in well over a decade.
This has increased speculation that the BoJ will cut interest rates to almost zero following its two-day meeting which ends on Friday. Analysts say Japan's central bank may also follow the Fed into buying commercial paper outright or purchasing asset-backed securities..
"With rates in Japan now higher than Fed rates, this puts further downward pressure on dollar/yen," Bank of America G10 currency strategist David Powell said.
"It also increases the possibility that the BoJ will cut rates by 20 basis points on Friday," he added.
Two-thirds of analysts polled by Reuters now expect the BoJ to cut rates this week, and most of them see rates falling to 0.1 percent..
The yen's gains prompted Naoyuki Shinohara, Japan's top financial diplomat, to declare on Wednesday that rapid movements in currency markets are undesirable.
Market players say they remain wary about the risk of Japan intervening to rein in the yen's climb, which is hurting the nation's exporters.
(Reporting by Jessica Mortimer; Editing by Toby Chopra)