* Euro hangs around $1.42 but may retest low from Thursday
* Greece cabinet shuffle coming up
* Nikkei steady, Brent oil edges down
* Investors are cautious about any Greece headlines
By Kevin Plumberg
SINGAPORE, Jun 17 (Reuters) - The euro slipped on Friday, with markets still largely unconvinced that Greece can dodge a default without political stability in Athens, keeping equity and commodity prices in a near-term downtrend.
Greece, whose prime minister is struggling to form a coalition government to push through unpopular austerity reforms, has become a focal point for investors looking for signals on whether to shed more risky assets and take defensive positions over the next few months.
Efforts by Olli Rehn, the European Union's top economic official to soothe markets overnight with expectations that the EU and International Monetary Fund will disburse a 12 billion euro loan in early July to Greece faded by the Asian session. The euro slipped fell back under $1.42, Japan's Nikkei stock index was flat and oil prices slid back to red.
After a steady feed of negative headlines on Greece, investors were cautious ahead of a cabinet reshuffle in Athens later on Friday.
"The wild card actually becomes the Greek political situation. The Greek government has stood out from the other troubled peripheral countries by surviving," Marc Chandler, global head of currency strategy at Brown Brothers Harriman, said in a note.
"A new cabinet will seek to push through the new austerity measures as a vote of confidence. This will take place in the coming days and before the IMF/EU have to write a check to Greece."
The Nikkei was steady in thin trading, with weakness in blue-chip stocks such as Honda Motor Co and Sekisui House , Japan's largest homebuilder, offset by bargain hunting of some retailer and technology shares.
"Bargain hunting may support the market to some extent, but volume may be low before the weekend," said Hiroichi Nishi, general manager at SMBC Nikko Securities.
The MSCI index of Asia Pacific shares outside Japan edged up 0.2 percent , though was not far from the three-month low hit on Thursday.
Helping support Asian stock markets, U.S. equity futures
edged up
U.S. stock investors have been consolidating their exposure through ETFs. Inflows into the SPDR S&P 500 ETF, a popular exchange-traded fund that tracks the benchmark U.S. stock index, soared to a three-year high in the week ending June 15, but, excluding ETFs, U.S. equity funds had weekly outflows of $2.03 billion during the week.
The euro fell 0.2 percent to around $1.4175 . Traders will look for the euro to retest Thursday's low around $1.4070 later in the day and will probably add to short positions if the currency gets near the lows.
Brent oil futures edged down 0.2 percent to $113.85 a barrel