* Greek T-bill auction well covered but with high yield
* Euro <EUR=> reverses gains vs dlr, hits session low
* Analysts say Greece still has tough times ahead
(Adds quote, detail)
By Neal Armstrong
LONDON, April 13 (Reuters) - The euro fell to a session low versus the dollar on Tuesday after results from a Greek Treasury bill auction showed the market still required a high premium to hold Greek assets.
Greece easily sold its allocation of 6 and 12-month T-Bills, rasing 1.56 billion euros with the inclusion of non-competitive bids, but at a yield which was costly for the debt-laden country. [ID:nLDE63C0FQ]
The euro rose briefly in the immediate aftermath of the auction as traders reacted to a strong bid to cover ratio.
However, analysts said attention then shifted to the yield Greece had to pay -- more than double those paid at auctions in January of bills with similar maturities.
"The higher yield confirmed the high risk premium demanded for Greek assets and that has put the euro bears in a stronger position," said Audrey Childe-Freeman, currency analyst at Brown Brothers Harriman.
"The euro was already showing signs of fatigue," she said.
On Monday, the euro climbed to a near one-month high of $1.3691 after euro zone finance ministers agreed on a financial aid package for Greece, before paring gains as investors sought clarification about the plan.
At 1048 GMT, the euro was trading at $1.3598, recovering from a session low of $1.3556. Traders said a Swiss bank had been buying euros for an option expiring later in the day.
"(The auction) does not really change the underlying position that Greece has very tough times ahead, it's going through a deep recession and that's going to lead the debt to GDP ratio to surge higher," said Ben May at Capital Economics.
Versus the yen <EURJPY=R>, the euro slipped to trade down 0.1 percent at 126.50 yen, staying above its overnight low of 125.71, hit as investor caution crept in regarding the Greek aid plan.
A draft from Japan's ruling party, released early in the European morning, put the Japanese currency under pressure.
The draft suggested the dollar <JPY=> should be kept around 120 yen. This pushed the greenback to the day's high at 93.42 yen. [ID: nTKG006692]. It last traded with slight losses at 93.17.
The dollar fell to its lowest in two weeks against the yen in Asia as stocks in the region slipped. Some said a report that the Bank of Japan may slightly revise up its consumer price forecast for the next fiscal year also helped the yen.
BOJ Governor Masaaki Shirakawa later said annual consumer price falls were expected to narrow as the output gap shrinks but also that the central bank did not rule out any policy option. [ID:nTKF106909]
The yen remained sensitive to market expectations on the Chinese yuan. Chinese President Hu Jintao told U.S. President Barack Obama Beijing would "firmly stick" to its own path for reforming the yuan's exchange rate, the official Xinhua news agency said.
Hu added the yuan's gains would neither balance Sino-U.S trade, nor solve the U.S. unemployment problem. [ID:nTOE63C00J]
The dollar was trading flat versus a basket of currencies <.DXY> at 80.60.
(Editing by Nigel Stephenson)