UPDATE 2-US, Europe, Japan planned March dlr rescue -Nikkei

(Updates with reaction from U.S. Treasury department, analyst comment) )

NEW YORK Aug 27 (Reuters) - The United States, Europe and Japan had planned to intervene and rescue a weak U.S. dollar in March, business newspaper Nikkei reported on Wednesday.

Officials from the U.S. Treasury Department, Japan's Finance Ministry, and the European Central Bank reportedly drew up a currency contingency plan to be undertaken over the March 15-16 weekend, Nikkei reported, citing sources familiar with the situation.

The monetary officials also agreed on a framework for coordinating dollar-buying intervention, the report said.

The officials did not specify an exchange rate for initiating the dollar rescue plan, but in the event of a free-fall, they all agreed to aggressively buy the greenback and sell yen JPY= and euros EUR=, according to Nikkei.

Under the intervention framework, Japan was to supply the yen necessary for the underlying currency swaps. The plan also called for using a previously established swap mechanism between the United States and Europe.

No coordinated intervention took place, however, as the dollar began recovering shortly after U.S. authorities brokered the buyout of Bear Stearns by JPMorgan Chase & Co (JPM.N).

As measured by the U.S. dollar index .DXY, the currency hit bottom on March 17, the first market day following the Bear Stearns deal announcement. It retested those lows in April and again in July, but is now nearly 9 percent stronger against the basket of major currencies included in the index.

A U.S. Treasury spokeswoman declined to comment on the report. The Federal Reserve also declined to comment.

A spokeswoman for the ECB said she had no immediate comment, but said the central bank would talk about the situation in the morning.

Overall, analysts said that even though a rescue plan never took place, the fact that global monetary officials showed concern for a weak dollar was significant.

"If anything, the fact that officials recognized the concern about the dollar's decline seems somewhat supportive for the dollar as maybe benign neglect was not so neglectful," said Marc Chandler, head of global FX strategy at Brown Brothers Harriman in New York.

"At the end of the day, however, President Bush is still set to be the first American president since at least the break-up of Bretton Woods that has not authorized intervention in the FX market, and given the recent price action the distinction looks relatively safe."

The United States, Europe and Japan have not intervened together in the currency market since September 2000. Japan's last intervention was in March 2004. (Reporting by Gertrude Chavez-Dreyfuss; Editing by Leslie Adler)