* Meeting of finance ministers does little to help euro * Spain deficit reduction target extended on year * German constitutional court hearing in focus * Chinese import data fans global growth concerns By Julie Haviv NEW YORK, July 10 (Reuters) - The euro came close to touching a two-year trough against the dollar and hit a five-week low versus the yen on Tuesday after a meeting of euro zone finance ministers failed to assuage concerns about the region's crisis despite efforts to help debt burdened Spain. Euro zone finance ministers agreed to grant Spain an extra year, until 2014, to reach its deficit reduction targets, in exchange for further budget savings and set the parameters of an aid package for the country's ailing banks. But the euro succumbed to selling pressure as they made no apparent progress on activating the bloc's rescue funds to intervene in bond markets to bring down spiralling borrowing costs for Spain and Italy. China also weighed on markets after mixed trade figures raised concerns about an accelerating downturn in the world's second-largest economy, adding to the cautious climate ahead of a German court hearing. "Adding to euro uncertainty, it might take days or weeks for a German court to decide whether a bailout fund could be used to ease the region's debt crisis," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington D.C. Germany's constitutional court is scheduled to hear a complaint about the ratification of the euro zone rescue fund and implementation of tough new budget rules. A verdict could potentially take a few weeks, which should markets on tenterhooks and possibly adding to bearish sentiment towards the euro. The court is not known to be pro-Europe and an adverse verdict could hurt integration plans. The euro fell as low as $1.2261, not far from a two-year low of $1.2255 hit the previous day. It last traded at $1.2284, down 0.3 percent on the day. The single currency also fell to a five-week low of 97.29 yen and last traded down 0.5 percent at 97.54, according to Reuters data. The euro has taken a hit ever since the European Central Bank cut interest rates last week, with a rise in Spanish bond yields suggesting there has been little let-up in investor concern over Spain's fiscal health or the wider euro zone debt crisis. Spanish and Italian borrowing costs, however, eased on Tuesday, with Spain's 10-year bond dipping back below the critical 7 percent level. Yields on Spanish and Italian bonds, however, remain at elevated levels and the euro is expected to remain under pressure despite developments at the meeting of the euro zone finance ministers. Analysts said the political hurdles on how to use the euro zone's rescue fund and prevent further contagion remained very high. "I think we have a long way to go before we reach the stage at which policymakers will be ready to act, particularly as it relates to potential bond purchases in the secondary market," said Todd Elmer, currency strategist for Citi in Singapore. Market expectations for the euro zone finance ministers' meeting had not been high to begin with, but the outcome highlights a seeming lack of urgency on the part of policymakers, Elmer said. CHINESE TRADE DATA FANS GROWTH FEARS China's imports in June grew at half the expected pace, underscoring concerns that China's economy and domestic demand are cooling quickly, although export growth was slightly better than expected. The U.S. currency last traded down 0.3 percent against the yen at 79.36 yen. Fragile and persistence concerns about global growth should limit should limit the greenback's downside and boost the yen, added Western Union Business Solutions' Manimbo. The Aussie dollar was last down 0.3 percent on the day at $1.0236. China is Australia's single largest export market and the health of the world's second-biggest economy is always a key mover of the commodity currency.

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