The Bank of Japan on Tuesday offered to pump 5 trillion yen ($61 billion) into the banking system, continuing its huge fund injection aimed at easing market jitters amid escalating damage from the earthquake.

It follows a record 15 trillion yen the BOJ offered in same-day market operations on Monday and its decision to ease monetary policy further through an expansion of its asset buying program.

Bids fell short of offers in Monday's market operations in a sign the central bank was feeding more funds than markets can swallow to keep borrowing costs low.

BOJ Governor Masaaki Shirakawa said on Monday the central bank will continue to offer huge amounts of funds to the market even if bids fall short of offers.

The Nikkei stock average plunged 4 percent at the outset of Tuesday's trading on news of a fresh explosion at Japan's quake-stricken nuclear power plant.

The BOJ doubled its asset buying scheme to 10 trillion yen and supplied record funds to banks on Monday to shore up confidence in the economy hit by a triple blow of a massive quake, a tsunami and a nuclear emergency.

(Reporting by Leika Kihara; Editing by Joseph Radford)

Japan Bank of Japan