FOREX-Euro gives up gains as clock ticks before Greece's likely default

(corrects name of trader in fourth paragraph)

* Euro/dollar holds chunk of gains after sharp overnight bounce

* Lower U.S. debt yields dent dollar, help euro

* Market players keep a wary glance on equity volatility

By Hideyuki Sano

TOKYO, June 30 (Reuters) - The euro slipped on Tuesday as traders braced for the near certainty that Greece will default on a repayment to the International Monetary Fund later in the day, putting the country at risk of disruptive exit from the euro zone.

The euro fell 0.4 percent to $1.1188, heading back to a four-week low of $1.0955 struck overnight in a knee-jerk reaction to heightened concern on the future of Greece and the euro zone.

While the currency's sharp drop invited some buying-on-dips on Monday, few players were willing to buy the common currency, which is facing its biggest crisis since the start of the currency union.

"Yesterday, we saw dip buying in the euro by a lot of players. Today we don't see any," said Masatoshi Omata, senior client manager of market trading at Resona Bank.

The common currency fell 0.7 percent against the yen, falling to 136.90 yen.

Against the Swiss franc, the euro held steadier at 1.04195 francs, after the Swiss National Bank on Monday intervened to stem the franc's strength.

But traders also said it may be unwise to read too much into moves driven mainly by flows from exporters and importers, with most investors staying to the sidelines to see how the Greek crisis pans out.

"Many in the market had already factored in the likelihood of Greece defaulting. But there is no guarantee the stability will last," said Kyosuke Suzuki, director of forex at Societe Generale.

With a default now looking inevitable, the focus fell on how popular opinion takes shape in Greece before the country holds a referendum on Sunday to vote on whether the terms set by creditors for a bailout were acceptable.

For now, many players were harbouring vague hopes that Greeks will give their assent to the bailout terms, sending their government back to the negotiating table.

Even (Taiwan OTC: 6436.TWO - news) that scenario is fraught with uncertainty as Prime Minister Alexis Tsipras suggested on Monday that he would resign if Greek voters accept a reform-for-aid deal that he had rejected.

In a sign traders are expecting volatile trading in coming days, implied volatility on one-week euro/dollar options rose further to around 18 percent from 16.5 percent late on Monday .

The yen was well-bid as investors remained risk-averse.

The dollar fell 0.2 percent to 122.31 yen, edging near five-week low of 122.11 yen hit on Monday.

Desire to hedge against further gains in the yen was more palpable in the option market.

The one-month risk reversal spread in the dollar/yen options widened in favour of yen calls to the highest level in more than four months. (Additional reporting by Shinichi Saoshiro; Editing by Simon Cameron-Moore)