* Euro takes a hit as Europe banking concerns rekindled
* Yen, Swiss franc rally on growing risk aversion
* Aussie hits day's low after PM secures minority govt
(Adds comment, updates throughout; previous TOKYO)
By Naomi Tajitsu
LONDON, Sept 7 (Reuters) - The euro fell broadly on Tuesday after rekindled concerns about the European banking sector and prompted investors to sell higher-risk currencies.
Investors were focused on an announcement by Germany's banking association that the country's 10 biggest banks may need 105 billion euros of additional capital under revamped rules.
The yen and the Swiss franc rallied, supported by their safe-haven appeal after a Wall Street Journal report highlighting the shortcomings of European bank stress tests earlier this year also helped spur risk aversion.
The German association announcement had limited impact whwn it was released on Monday as market volume was thin due to a U.S. market holiday.
"For the moment, the news about the German banks and the stress tests will weigh on risk appetite," said Sven Schubert, currency analyst at Credit Suisse in Zurich.
"But concerns about the tests were already known, so the impact may be short-lived."
He expected investors to pick up euros under $1.28, and that the single currency may drift towards $1.30 in the near term.
By 0753 GMT, the euro had fallen half a percent on the day to $1.2797 after touching a session low around $1.2780. It retreated from $1.2920 hit on Monday, its highest in nearly three weeks.
Further losses in the euro were limited due to broad demand for euros below $1.28, with traders saying central banks were picking up the single currency at the day's low.
The euro's losses helped prod the dollar 0.4 percent higher versus a currency basket to 82.372, recovering from a slide to its weakest in more than three weeks on Monday.
Against the yen, the single currency fell roughly 1 percent on the day to 107.30 yen, edging towards a nine-year low of 105.44 yen hit in August.
The Japanese currency rallied across the board, pushing the dollar down 0.4 percent to 83.72 yen, near a 15-year trough of 83.58 yen touched last month.
The yen hit the day's high after Bank of Japan Governor Masaaki Shirakawa said monetary authorities could not control forex rates, increasing speculation Japan may not be preparing to act to stem yen strength at the moment.
"(Shirakawa) has essentially ruled out intervention in the near term," CitiFXWire analysts said in a client note adding that the statement helped to encourage yen bulls.
Shirakawa's comments followed the BOJ's decision earlier in the day to hold off from additional monetary policy easing, while setting the stage for more economic stimulus next month.
AUSSIE SLIDES
The market's focus on risk aversion also boosted the Swiss franc, pushing the euro 0.8 percent lower to 1.2930 francs. The dollar was down 0.2 percent at 1.0098 francs.
The Australian dollar dipped 0.6 percent on the day to a session trough of $0.9115, having slipped from a four-week high of $0.9181 hit on Monday.
Australian Prime Minister Julia Gillard securing a minority government after weeks of political uncertainty initially prompted some buying in the Australian currency.
But those gains were fleeting and the Aussie hit the day's low on speculation the new government would press ahead with a new mining tax.
The Reserve Bank of Australia kept rates at 4.5 percent as expected on Tuesday. While the central bank was generally upbeat on the Australian economy, it mentioned some uncertainty about overseas.
(Editing by Nigel Stephenson)