(Updates levels throughout; adds European futures)
* NZ$ falls to 5-month lows on incoming govt's policies
* MSCI ex-Japan up 0.1 pct; Nikkei extends 16-day winning streak
* European futures point to a weak start for equities
* Euro weighed by political uncertainty; ECB meets Thursday
SYDNEY, Oct 24 (Reuters) - Asian shares held near recent decade highs on Tuesday and major currencies kept to narrow ranges, while the New Zealand dollar stumbled to five-month lows as the incoming Labour coalition's policies unsettled investors.
Prime Minister-designate Jacinda Ardern's tough stance on foreign investment in housing and on immigration could prove negative for the New Zealand dollar, given the country runs a current account deficit. In addition, Ardern said on Tuesday her government plans to review and reform the Central Bank Act to possibly include employment, alongside inflation, as a dual target.
The kiwi, the world's 11th most-traded currency, duly shed all its early gains to be down 0.5 percent to $0.6930, a level not seen since May 19.
"The announcement...put NZD under broad pressure once more," said Matt Simpson, Singapore-based senior analyst at Faraday Research. "This may or may not necessarily turn out to be a bad thing but investors are focused on the uncertainty and are shorting the kiwi."
The currency has fallen in four out of the last five sessions on fears a slowdown in foreign investment under the new government could hurt the broader economy and force the Reserve Bank of New Zealand to keep rates at current record lows for longer.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.1 percent weak at 548.49 points, not far from a 10-year high of 554.63 set last week.
Japan's Nikkei extended its 16-day winning streak to a 21-year peak while China's blue-chip CSI300 index jumped to the highest in more than two years.
"Whether the gains can continue this week is obviously yet to be seen. I remain a bull, but of the view that these markets are tired, fatigued and need new information to fuel the beast," said Chris Weston, chief strategist at IG Markets.
European futures pointed to a weak start with the STOXX 50 down 0.2 percent as Spain's separatist crisis entered another week.
Madrid took the unprecedented step of dismissing the government of Catalonia on Saturday in a last-resort effort to thwart its push for independence. Catalan leaders called for civil disobedience in response.
Germany's DAX futures edged 0.1 percent lower ahead of a Bundestag meeting where the far-right Alternative for Germany (AfD) is set to clash with other parties over its nomination for a senior parliamentary post.
The political tensions have weighed on the euro which hovered near two-week lows at $1.1760. The market is on edge ahead of a European Central Bank meeting on Thursday where it is expected to announce some form of policy tapering.
Investors were also biting their nails as suspense builds over who might be the next chair of the Federal Reserve after Janet Yellen's term expires in February.
U.S. President Donald Trump has indicated an announcement is expected "very shortly."
The market is betting on Federal Reserve Governor Jerome Powell as the likely choice while Trump is also weighing on Stanford University economist John Taylor and current Fed chief Yellen.
The dollar index inched lower to 93.796 but stayed in sight of a recent two-month peak.
In commodities, base metals were stronger with copper futures up 1.5 percent.
Spot gold edged 0.1 percent lower to $1280.60 an ounce.
Brent crude slipped 4 cents to $57.33, while U.S. crude added 4 cents to $51.92 a barrel.
(Reporting by Swati Pandey; Editing by Jacqueline Wong and Eric Meijer)