RPT-GLOBAL MARKETS-Euro off highs after Greek sale, stocks down

(Repeats to detach from previous item. Text unchanged.) * MSCI world equity index down 0.2 pct at 314.35

* Euro off highs, bunds supported after Greek T-bill auction

* Yen erases gains after ruling party lawmakers comments

By Natsuko Waki

LONDON, April 13 (Reuters) - The euro erased short-lived gains while German government bonds drew support on Tuesday after a debt sale by Greece that, while successful, reminded investors the country's borrowing costs remain very high.

World stocks fell from the previous day's 18-1/2 month high as investors awaited a slew of key corporate earnings to help gauge the strength of the economy. The yen wiped earlier gains after lawmakers from Japan's ruling party said the domestic currency should fall to around 120 per dollar.

Greece easily sold a total of 1.2 billion euros ($1.63 billion) of 6-month and one-year T-bills, passing its first borrowing test since the euro zone reached a deal on a standby rescue package for the debt-laden country.

But analysts said the yields on the bills -- 4.55 percent and 4.85 percent respectively -- were still high, reminding investors that borrowing remained costly and the budget under pressure.

"Clearly the yields are still very high and longer-term bond yields remain very high even by recent standards," said Ben May, economist at Capital Economics.

"So it 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."

The euro rose around 20 ticks after the sale, but then fell back to stand steady on the day at $1.3590 .

The Greek/German 10-year government bond yield spread reached a session low of 356 basis points, about 5 basis points tighter on the day. The German bund future was up 4 ticks.

"The outright yield on the bills is still some way above the rates implied by (the weekend's) package and as such reflects a degree of scepticism about the facility," said Adam Cole, head of currency strategy at RBC Capital Markets.

In Japan, a group of lawmakers from the ruling party said efforts should be made to maintain "appropriate" currency levels of around 120 yen per dollar.

The yen fell as low as 93.42 per dollar after the comments, erasing earlier gains.

The draft proposal also called for the government and the Bank of Japan to use all monetary and fiscal policy tools available to erase deflation.

The dollar <.DXY> was down 0.1 percent against a basket of major currencies.

STOCKS AND EARNINGS The MSCI world equity index <.MIWD00000PUS> fell 0.2 percent after reaching its highest level since September 2008 on Monday.

The FTSEurofirst 300 index <.FTEU3> fell 0.1 percent while emerging stocks <.MSCIEF> lost half a percent. U.S. stock futures pointed to a weaker open on Wall Street later.

U.S. companies reporting results this week include JP Morgan , Google , Bank of America and General Electric . After the U.S. market close on Monday, Alcoa kicked off the earnings season, matching Wall Street estimates.

According to Thomson Reuters data, firms on the S&P 500 index are expected to report a 37.1 percent rise in quarterly earnings growth. Double-digit growth is expected to extend into the first quarter of 2011.

U.S. crude oil fell 0.5 percent to $83.95 a barrel.

(editing by John Stonestreet)