The Bank of Japan offered to pump a record $85 billion into the banking system on Monday, its first same-day market operation since the Greek debt crisis, to soothe market jitters after a massive earthquake hit northeastern Japan.

The move is aimed at stabilizing financial markets and ensuring smooth fund settlement, a BOJ official told Reuters.

This was the central bank's first same-day operation, in which it injects funds to the market on the same day it offers them, since last May, when Greece's debt woes roiled global financial markets.

The amount, at 7 trillion yen ($85 billion), was much higher than the usual 1 trillion to 2 trillion yen injected in the wake of big market-moving events, indicating the central bank's determination to keep borrowing costs low and stable.

The auction drew fewer bids than the amount offered, resulting in the BOJ pumping 5.1 trillion yen into the market, in a sign the banking system remained awash with cash.

The BOJ apparently is making utmost efforts to maintain order in markets with ample fund supply, said Hideo Kumano, chief economist at Dai-ichi Life Research Institute in Tokyo.

The BOJ may ease policy by expanding its asset-buying fund or some other measures in the near future. But it's hard to predict what it will do at today's policy meeting.

BOJ Governor Masaaki Shirakawa said on Sunday that the central bank would provide huge amounts of liquidity to the banking system on Monday, reinforcing the bank's resolve to keep markets stable in the wake of the disaster.

The central bank will meet later on Monday for a rate review, which was cut short from two days to one, and is seen keeping interest rates on hold at a range of zero to 0.1 percent.

At Monday's rate review, the BOJ is expected to pledge to supply as much money as needed to keep jitters over the quake from destabilizing markets. It may also signal its readiness to ease policy further if the damage from the quake threatens Japan's economy as it heads toward a moderate recovery.

Japan is battling to prevent a nuclear catastrophe and to care for millions of people without power or water in its worst crisis since World War Two, after a massive earthquake and tsunami that are feared to have killed more than 10,000 people.

The BOJ said in a statement that there were no reports so far of system glitches or funding problems at Japanese financial institutions, including those in the quake-struck region.

(Additional reporting by Yoshifumi Takemoto; Editing by Edmund Klamann)

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