* Wall Street posts steep losses as Athens appears set to default
* Euro off overnight highs scaled as trades unwound
* U.S. crude futures continue to fall after overnight tumble
By Lisa Twaronite
TOKYO, June 30 (Reuters) - Asian shares edged up and the euro sagged in early Asian trading on Tuesday as Greece lurched toward defaulting on a looming debt payment, raising the likelihood of the cash-strapped nation's exit from the euro zone.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1 percent, while Japan's Nikkei stock index added 0.2 percent.
"All in all many in the market had already factored in the likelihood of Greece defaulting. But there is no guarantee the stability will last. What is worrying is the volatility in the risk asset markets, which could impact currencies," said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.
Greece will not pay a 1.6 billon euro loan instalment due the International Monetary Fund on Tuesday, a Greek government official told Reuters, after talks between Athens and its creditors broke down over the weekend when Prime Minister Alexis Tsipras called a surprise referendum on the austerity plan.
Asian investors were also nervously awaiting the reopening of China's markets after stocks plunged further on Monday, taking losses to more than 20 percent since their mid-June highs.
Fears about the fallout of the Greek crisis have roiled global markets. The CBOE Volatility "fear" index, a measure of the premium traders are willing to pay for protection against a drop in the S&P 500, jumped more than 30 percent to a nearly five-month high.
"The Greek government's willingness to walk into the fire is a dangerous proposition for Europe and the global markets," Kathy Lien, managing director of FX strategy for BK Asset Management in New York, said in a note to clients.
Ratings agency Standard and Poor's cut Greece's sovereign debt rating one notch further into junk levels to CCC-, saying there was a 50 percent probability it would leave the euro zone.
U.S. stock futures were up about 0.2 percent in Asia, suggesting that a semblance of stability could return to markets after steep losses in the previous session.
In overnight trading on Wall Street, all three major stock indices tumbled, with the Dow Jones industrial average shedding 1.95 percent, the S&P 500 losing 2.09 percent and the Nasdaq Composite dropping 2.4 percent.
The euro fell to a one-month low of $1.0955 on the EBS trading platform on Monday and then reversed direction in North American trade as investors exited their euro-short positions, pushing the common currency as high as $1.1279. It was last down about 0.3 percent on the day at $1.1206.
Until volatility spiked due to developments in the Greek crisis, investors had used the euro to fund carry trades - a strategy of borrowing in a low-yielding currency to buy higher-yielding assets.
The dollar was flat on the day at 122.50 yen after falling to a one-month low of 122.10 yen on Monday, with market participants citing options-related support at 122.
In commodities trading, U.S. crude oil futures extended their fall after skidding more than 2 percent on Monday to three-week lows. U.S. crude was down about 0.1 percent at $58.26 a barrel. (Additional reporting by Shinichi Saoshiro in Tokyo; Editing by Shri Navaratnam)