* Greek worries hurt euro; dollar, yen gain on risk aversion
* China speculation also benefits yen
* Sterling hit by political uncertainty; Aussie falls
(Updates prices; changes byline, dateline; previous TOKYO)
By Jessica Mortimer
LONDON, April 16 (Reuters) - The euro fell on Friday on concerns about how Greece will service its debt, while the dollar and the yen gained as falls in equity markets led investors to cut positions in riskier currencies.
The yen also gained as the market looked for clues to whether China will allow more yuan appreciation or tighten monetary policy, and short-term players cut holdings in cross/yen on concerns the yen could rise sharply in response.
Falls in equities after a recent strong run prompted investors to neutralise riskier positions funded by the low-yielding yen and this, combined with recent solid U.S. data, supported the dollar.
"Risk aversion and speculation of yuan revaluation is supportive for the yen," said Niels Christensen, currency strategist at Nordea in Copenhagen.
"We've had some good data out of the U.S. lately, including retail sales on Wednesday, and the recent backdrop is supporting the dollar, while the Greece situation is weighing on the euro."
Athens asked on Thursday for talks with European authorities and the International Monetary Fund, a step towards Greece obtaining billions of euros in emergency loans.
The euro has erased most of the gains made at the beginning of the week in response to euro zone leaders agreeing terms of a joint EU-IMF bailout deal for Greece as concerns intensify about how such aid would be implemented.
At 0744 GMT, the euro was down 0.3 percent against the dollar at $1.3533 while against the yen it fell 0.8 percent to 125.34 yen. The single currency earlier hit one-week lows of $1.3515 and 125.09 yen.
"The euro is trading just below $1.3550 in early European session, with near-term support found at $1.3495 and then $1.3445," Brown Brothers Harriman analysts said in a note.
The dollar index, which tracks the greenback versus a basket of major currencies, rose 0.2 percent to 80.637, recovering from a four-week low of 80.031 hit on Wednesday. It faces some resistance in the 80.75 area, traders said.
Against the yen, however, the dollar fell 0.4 percent to 92.62 yen after hitting a two-week low around 92.54.
Stop loss orders for the dollar are thought to be placed from 92.50 yen down to 92.20 yen, traders said.
STERLING, AUSSIE FALL
Sterling fell on concerns a May 6 UK election may result in no one party winning a majority, as polls showed the heads of the two main parties were beaten in a TV debate by the leader of the third party, the Liberal Democrats..
Sterling fell 0.6 percent against the dollar to $1.4302, while the euro was 0.3 percent higher at 87.86 pence.
The higher-yielding Australian dollar also came under selling pressure, falling 0.4 percent to $0.9310 and 0.8 percent to 86.29 yen as risk aversion grew, pushing European equities down 0.3 percent.
The Aussie has been a favoured buy against the yen but liquidation of long positions picked up pace after it failed to punch above a 19-month high of 87.55 yen set on Wednesday, sending it spinning down as much as 1 percent near 86.00 yen.
(Additional reporting by Kaori Kaneko in Tokyo)