Central banks from Tokyo to Sydney injected extra cash into banking systems or pledged to do so on Friday, as Asia joined a global campaign by monetary authorities to calm panicky credit markets.

The Bank of Japan and the Reserve Bank of Australia added more money than usual to prevent short-term rates from spiking, albeit on a much smaller scale than the European Central Bank's

(ECB) record 94.8 billion euro injection on Thursday.

What the central banks are doing is a concerted effort to inject liquidity. And the worrying thing is that they do that when the system is not functioning the way it should, said Jimmy Koh, a currency strategist at United Overseas Bank.

At the same time, Malaysia, Indonesia and the Philippines intervened in markets to support their currencies by selling dollars, traders said, as escalating credit market worries hit risky assets around the region.

The moves came after the ECB pumped a record amount of cash into Europe's money markets to make sure that European banks had adequate short-term funds for lending. The U.S. Federal Reserve followed suit on a smaller scale.

The trigger was news that France's biggest-listed bank, BNP Paribas, had frozen $2.2 billion worth of funds hit by U.S. subprime mortgage woes.

Investors fear the damage caused by the U.S. subprime meltdown runs deeper than originally estimated and will put an even tighter squeeze on credit markets worldwide.

This month is going to turn out to be a horrific month for hedge funds in particular, said Jay Moghe, managing director at Opes Prime Asset Management in Singapore.

Aside from the subprime exposure that a minority of funds have, the entire industry including the staple long/short managers will be affected adversely by the vicious volatility.

A Bank of Japan official said the bank injected funds at its regular money market operation on Friday due to a slight rise in the benchmark overnight call rate.

The bank for the world's second-largest economy offered to supply 1.0 trillion yen ($8.45 billion) in funds. Traders said the amount was at the higher end of market expectations, but was not a major surprise.

The Reserve Bank of Australia (RBA) on Friday added more than twice the usual amount of money into the banking system, injecting A$4.95 billion ($4.19 billion) in its regular morning money market operation.

The injections were done to ensure there were enough funds for money markets to operate smoothly and to prevent short-term rates from spiking. Analysts saw the measures as part of central banks' mandate to ensure markets function properly and did not represent a shift in monetary policy.

While no reports had surfaced in Asia of a drying up of credit markets on par with the problems in Europe, financial markets took a battering.

Asian stocks slumped across the board and the yen extended its gains as investors dumped riskier assets following a rout in global markets sparked by a flare-up in credit jitters. The flight to safety shored up Japanese government bonds (JGBs) and U.S. Treasuries, sending yields down.

Elsewhere in the region, central banks pledged to open the tap on the first signs of a seizure in money markets.

The Bank of Korea's head of monetary policy, Jang Byung-wha, told Reuters on Friday the central bank was ready to take steps to maintain stability in the local financial system, such as supplying extra funds, if a credit crunch arises.

South Korean financial policy makers plan to hold a meeting later on Friday to assess the current financial market situation.

Singapore's central bank also said that it was ready to inject cash if needed, but noted it was sticking to its existing monetary policy.

If there are liquidity bottlenecks, certainly we will come in to inject more liquidity. At this stage, the liquidity management is unchanged that we do not see any undue problems, Ong Chong Tee, deputy managing director of the Monetary Authority of Singapore, told a news conference.

(With additional reporting by Saeed Azhar and Vidya Ranganathan in Singapore)

BNP Paribas European central bank