EURO GOVT-Irish 10-yr yield spread at new wides

LONDON, Sept 7 (Reuters) - The premium investors demand to hold Irish 10-year government bonds rather than benchmark German Bunds hit a euro lifetime high on Tuesday on renewed jitters about the European banking sector.

The Wall Street Journal said its analysis showed bank stress tests published more than a month ago had understated some European lenders' holdings of potentially risky government debt.

The Irish ten-year yield spread IE10YT=TWEBDE10YT=TWEB was 21 basis points wider at 374 basis points.

"There's a turnaround in sentiment overnight with the move in euro/dollar following the Wall Street Journal article on the bank stress test," a bond trader said.

"So widening you've seen in Portugal, Greece and Ireland means you've seen a bid in the Bund again."

The Portuguese spread hit its widest since May at 353 bps, 17 basis points wider on the day, with concession building ahead of Wednesday's debt auction adding to pressure.