Shares and the euro slipped on Tuesday, as initial relief over Greece's approval of harsh austerity measures in exchange for crucial aid gave way to doubts about Athens' ability to pursue the reforms, with social unrest intensifying.

The euro and sterling fell after rating agency Moody's reminded investors that Europe was still deeply mired in the debt crisis, warning it may cut the top-notch ratings of France, the United Kingdom and Austria while downgrading Italy, Portugal, Spain, Slovakia, Slovenia and Malta.

MSCI's broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> fell 0.2 percent, after rising about 0.8 percent on Monday when the Greek parliament passed the deeply unpopular austerity bill. Serious violence across the country underscored the tough challenge facing the government.

Japan's Nikkei <.N225> opened down 0.2 percent. <.T>

World stocks inched up on Greek relief but the euro dipped on a lack of investor confidence in Greece. The euro dropped 0.3 percent to $1.3153 on Tuesday, retreating from Monday's high of $1.3284.

Market uncertainty remains high, since a number of steps remain to ensure that there is no disorderly default in the near term, Barclays Capital said in a note, adding that Greek parliamentary elections in April would make implementation risks of the austerity measures particularly challenging.

We think the current environment favours relative value trades that are less directional on overall market risk appetite, it said.

U.S. crude oil eased 0.3 percent to $100.61 a barrel on Tuesday, after surging 2.3 percent to settle at $100.91 a barrel the day before, supported by the Greek news and concerns about supply disruptions from tensions between Israel and Iran. Brent settled up 62 cents at $117.93 a barrel on Monday.

The passage of the austerity steps was only one condition for granting the new 130 billion-euro bailout, a lifeline for Greece to ride out a major bond redemption on March 20.

Europe gave Greece until Wednesday, when euro zone finance ministers are expected to meet, to convince sceptical international creditors that it would stick to the promises.

Athens must also specify how 325 million euros of the 3.3 billion euros demanded in budget savings will be achieved and Greek political leaders must give a written commitment to implement the terms of the deal.

Provided there are no further setbacks at the EU meeting on Wednesday, terms of a bond swap deal with private bond holders to ease Greece's debt burden would then be announced.

RISK POSITIVE SIGNS

Greek woes were far from being resolved, but the progress towards a solution and expectations for another round of huge liquidity injections from the European Central Bank later this month kept some degree of risk positive sentiment intact.

Expectations Europe would avoid a disaster pushed key euro zone interbank lending rates, three-month Euribor rates, down to their lowest in over a year on Monday, while rising risk appetite pushed yields on U.S. 3-month treasury bills to a six-month high.

Lower-rated euro zone debt rose on Monday, with Italian 10-year yields falling further to 5.56 percent, taking their decline so far this year to more than 150 bps.

A slew of debt auctions this week by Italy, Spain and France will be watched closely as a gauge of investor confidence in the euro zone's high-yielding sovereign debts.

Asian credit markets were calm early on Tuesday, with the spreads on the iTraxx Asia ex-Japan investment grade index barely changed from Monday.

As markets regained some stability, the search by investors for higher returns continued into the first week of February.

EPFR Global-tracked Emerging Markets Bond Funds drew a record $2.14 billion while Emerging Markets Equity Funds saw inflows of $5.8 billion, a 68-week high.

Other assets perceived to be risky last year also attracted strong interest, including High Yield Bond Funds which posted their second highest weekly inflow on record and Europe Equity Funds which saw their best week in nearly six months, EPFR said.

The Bank of Japan concludes a two-day policy meeting later in the day. The BOJ may respond to mounting pressure to set a Fed-style explicit inflation target by using stronger language to describe its commitment to beating deflation.

(Editing by Richard Pullin)