* MSCI Asia ex-Japan hits 3-week peak, Nikkei at 1-week high
* Euro, Aussie slip from highs, dollar index firms
By Chikako Mogi
TOKYO, July 30 (Reuters) - Asian shares extended their gains on Monday, supported by expectations the Federal Reserve and the European Central Bank will deliver new measures to underpin their fragile economies, but the euro fell as caution kept a firm cap.
MSCI's broadest index of Asia-Pacific shares outside Japan gained as much as 1.1 percent to a three-week high, after posting its biggest daily rise in a month on Friday with a 2.2 percent climb.
Korean shares touched their highest in four weeks while Australian shares rose to their highest in more than two months. Japan's Nikkei stock average was up 0.6 percent after hitting a one-week high.
"At this point, this looks to be more of a relief rally and although expectations of central bank actions are there, investors aren't buying into it with a lot of conviction," said Kim Soo-young, an analyst at KB Investment & Securities, of the Korean equities market.
The turnaround in market sentiment from recent heavy selling was triggered last week when ECB President Mario Draghi pledged he would do whatever it takes to safeguard the single currency.
His comments raised hopes the ECB, which holds its policy meeting on Thursday, will act to ease borrowing strains for Spain and other highly indebted countries facing surging yields that threaten to derail fiscal restructuring efforts.
Investors grew slightly more cautious about their risk appetite, however, pushing the Australian dollar off the day's high at $1.0498 in early Asian trade. The dollar index , measured against a basket of major currencies, inched up 0.1 percent and crawling away from Friday's three-week low.
The euro fell 0.4 percent to $1.2285, well below a three-week high of $1.2390 touched on Friday. It slid to a two-year low around $1.2042 last week before Draghi's comments.
Uncertainty persisted in Europe about specific action, despite authorities speaking of the urgency to tackle Spain's fiscal woes, which drove its 10-year government debt yield to euro-era highs of 7.78 percent last week. Greece continued with its battle to convince creditors of its debt-cutting plans.
Jeff Sica, chief investment officer of Sica Wealth Management, was sceptical the optimism would be sustained.
"The problem being that central bankers do not have the ability to do 'whatever it takes' to save the euro. They only have the ability to undermine their credibility by making promises they cannot keep," he said, adding that the euro's recent strength has been based on short covering and its short term appreciation would be temporary.
Data on Friday showed that in the latest week, speculators cut their bets for the euro's further decline and reduced their long bets on the U.S. dollar to the lowest in 2-1/2 months. They also raised their longs on the Australian dollar and the yen.
HOPES FOR FED
The U.S. central bank also holds a policy meeting on Tuesday and Wednesday, with speculation rising the Fed might do more to bolster recovery, after data showed U.S. second-quarter gross domestic product expanded at a 1.5 percent annual rate, the weakest pace of growth since the third quarter of 2011.
"It (the GDP) contained enough weakness to support the Fed's commitment to an exceptionally long period of nearly zero overnight interest rates," said Richard Hastings, macro strategist at Global Hunter Securities.
"But the Fed's real catalyst comes from the most recent data in July, for Q3, which suggests a truly weaker story with greater risks of the U.S. drifting towards growth rates of 0.5 percent and nearly recessionary conditions in Q1 2013," he said.
U.S. Treasury Secretary Timothy Geithner will travel to Germany to meet with his German counterpart and ECB head Draghi on Monday.
On Greece, European policymakers are working on options that may include having the ECB and national central banks take huge losses on the value of their bond holdings, while Greek politicians have agreed on most of the austerity measures demanded by its creditors.
Asian credit markets firmed slightly, narrowing the spread on the iTraxx Asia ex-Japan investment-grade index by 3 basis points.
Oil was little changed, with Brent steady at $106.47 a barrel and U.S. crude easing 0.1 percent at $90.03.
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