* MSCI Asia ex-Japan in ranges, Nikkei falls 0.6 pct
* Euro steadies vs dollar
* Firmer dollar weighs on gold while oil recovers
TOKYO, - Asian shares and the euro traded in tight ranges on Thursday ahead of a Spanish bond sale seen as a key test of investors' risk appetite amid renewed concerns over the euro zone's debt crisis.
MSCI's broadest index of Asia-Pacific shares outside Japan edged 0.1 percent higher, spending the morning session vacillating in a band between up 0.2 percent and down 0.2 percent. Australian shares outperformed with a 0.4 percent gain, helped by mining and energy stocks as oil prices rose.
Japan's Nikkei average fell 0.6 percent, taking its cue from a fall in U.S. stocks on Wednesday as uninspiring earnings from tech bellwethers IBM and Intel gave investors a reason to take profits a day after Wall Street's best gains in a month.
"I would expect a narrow range in today's trading because traders will have a 'wait and see' approach ahead of tonight's Spanish 10-year bond auction," said Miguel Audencial, trader at CMC Markets. "The result will give a good indication on how the market will perform in the next few days."
Doubts over Europe's ability to stick to harsh measures to slash high public debts began to grow when Spain abruptly relaxed its deficit targets earlier this month, and Italy said on Wednesday its priority was now reviving economic growth, delaying by a year its budget balancing goal.
Bank of Spain data showed on Wednesday how sliding house prices and a looming recession adversely impacted the financial sector, with Spanish banks' bad loans rising to their highest level since Oct. 1994 in February.
Spain faces a significant challenge, with an auction of two- and 10-year bonds later on Thursday. Its 10-year government bond yield shot above 6 percent earlier this week, raising fears that the country would not be able to manage its public financing and would have to turn to an international bailout.
The euro steadied near $1.3120 while the dollar rose 0.3 percent against the yen at 81.50. A firmer dollar measured against a basket of majorcurrencies weighed on spot gold, which eased 0.1 percent to $1,640 an ounce.
SPANISH TEST
In addition to the test of market confidence in Spain's restructuring efforts, there are several key factors that could set the tone for the single currency and risk appetite in coming weeks.
One is a two-round presidential election in France starting on Sunday, with opinion polls showing French President Nicolas Sarkozy facing a tough challenge from Socialist Francois Hollande, who has a double-digit lead for a May 6 runoff.
"If the first round results show Sarkozy losing, it could be seen by markets as raising the probability of him losing on May 6, putting at risk the close cooperation between France and Germany in resolving the euro zone crisis," said Ayako Sera, a senior market economist at Sumitomo Trust and Banking.
"It is difficult for investors to tip the balance of risks either way. The euro is holding relatively firm despite the uncertainties, but that's because investors have already built a high level of euro short positions and are sidelined," she said.
CONTAGION WORRIES
Markets were jittery about available support capacity for containing Spain's fiscal woes from spreading to vulnerable peripheral euro zone economies, with the focus on the role played by the European Central Bank.
The ECB maintains that governments must act to tackle their fiscal reforms, not rely on action from the central bank, a view reiterated by ECB policymaker Jens Weidmann in an interview with Reuters.
Europe urgently needs to bolster its fragile safety net as highly indebted euro zone nations struggle to implement fiscal austerity measures, and global finance ministers meeting in Washington later this week could agree on the amount by which they will boost the International Monetary Fund's financial firepower to help supplement Europe's rescue scheme.
The United States, which will not spend any more money of its own, on Wednesday threw its support behind commitments by other nations to boost the IMF's financial resources, signalling greater satisfaction among Group of 20 nations with Europe's efforts to resolve its debt crisis.
Oil futures recovered after falling on Wednesday on data which showed inventory continued to build in the United States and on worries that the euro zone debt crisis would curb economic growth and dampen demand for commodities including oil.
U.S. crude was up 0.1 percent at $102.74 a barrel while Brent rose 0.3 percent at $118.30.
Asian credit markets weakened, with the spread on the iTraxx Asia ex-Japan investment-grade index widening slightly by 2 basis points.
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