* Italy, Greece appoint new government leaders
* Italian debt yields resume rise after auction
* Yen strongest since last intervention by Japan (EUREX: FMJP.EX - news) (Updates prices, adds details)
NEW YORK (Frankfurt: A0DKRK - news) , Nov 14 (Reuters) - The euro slid against the U.S. dollar on Monday as new governments in Italy and Greece failed to ease fears about the euro-zone sovereign debt crisis, a crisis that German Chancellor Angela Merkel termed Europe (Chicago Options: ^REURUSD - news) 's "toughest hour since World War Two."
Italy paid a euro-era high price to sell five-year bonds on Monday, just a day after former European Commissioner Mario Monti was named to lead the country -- a move that had been hoped would help restore investor confidence.
News that Italian Treasury Director General Vittorio Grilli is considering resigning as early as Tuesday to take up a job in the private sector with investment bank J.P. Morgan (KOSDAQ: 019990.KQ - news) , according to sources, added to the euro's woes. For details, see [ID:nR1E7MC00A]
In Greece, new Prime Minister Lucas Papademos, a former European Central Bank vice president, will have to win Wednesday's confidence vote in his cabinet before meeting euro-zone finance ministers in Brussels on Thursday, as uncertainty persisted over whether Athens will receive the next tranche of aid to avoid a default. [ID:nL5E7ME25X]
Papademos said on Monday that Greece's only choice was to remain in the euro zone, and the country had to widen its tax base and fight rampant tax evasion, a problem identified by economists as a serious hindrance to Greece's budget performance. [ID:nA8E7MA013]
"Like many times before, the Europeans delivered the necessary policy response to avert a meltdown with both Italy and Greece moving to install national unity governments, led by technocrats," said Mark McCormick, currency strategist at Brown Brothers Harriman in New York.
But "this is unlikely to be a silver bullet and many questions still remain," he said. "Outside of brief short- covering rallies, we expect the euro to remain under pressure in the coming weeks, and ultimately end the year around $1.29."
German Chancellor Angela Merkel warned that Europe faced its "toughest hour since World War Two" and urged her party to set aside misgivings about the euro and accept closer political integration as a solution to the bloc's deepening debt crisis.
But she offered no new ideas for resolving the crisis that has forced bailouts of Greece, Ireland (Xetra: A0Q8L3 - news) and Portugal, and stirred doubts about the survival of the 13-year-old currency area. [ID:nLDE7AD01R]
The euro fell 0.8 percent to $1.3636 . It had fallen as low as $1.3590 on Reuters data after breaking below support at its 100-week moving average around $1.3638. It also slid 0.8 percent to 105.15 yen .
Further downside support lies around $1.3360, the low in September, followed by $1.3145, the October low, technical analysts said. Resistance is seen near $1.3870, its high set on Nov. 1, with offers from Asian sovereign investors reportedly just above that.
The euro-zone common currency briefly pared losses after an auction of 3 billion euros of five-year Italian bonds drew decent demand, despite yields hitting 6.29 percent, a high since the euro was introduced in 1999.
But the relief was short-lived. [ID:nL5E7ME1WB1]
In a sign that the debt crisis may spread further, Spanish 10-year bond yields rose above 6 percent on Monday for the first time since the European Central Bank started to buy the country's bonds in August.[ID:nL5E7ME2C8]
YEN STRENGTH
The dollar was unchanged at 77.12 yen , after earlier falling as low as 76.811 on electronic trading platform EBS , its lowest since Japan's massive yen-selling intervention efforts on Oct (KOSDAQ: 039200.KQ - news) . 31.
Dollar/yen has now broken through the 61.8 percent Fibonacci retracement of the move on intervention on an intraday basis both Friday and Monday.
"Intervention concerns are likely to see yen advances tempered as Japanese officials continue to eye the FX markets for 'excess speculation,' with pledges from Prime Minister Yoshihiko Noda that actions will be taken to aggressively combat 'excessive currency fluctuations,'" said Michael Boutros, currency analyst at DailyFX.com.
The head of the International Monetary Fund said on Saturday that Japan's recent currency intervention aimed at curbing excess volatility was in line with the spirit of G7 and G20, although concerted action is the most efficient way. [ID:nT9E7HU00M]
Traders said interventions, particularly unilateral actions such as Japan's, are unlikely to have a long-term impact and the dollar may slip on any signs of problems in the U.S. economy. (Reporting by Nick Olivari and Wanfeng Zhou; Editing by Jan Paschal)
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