* Benchmark yen Libor in biggest daily rise since Nov. 2009
* Move expected to be shortlived on BoJ liquidity boost
* Euro Libor falls on ample liquidity
By Emelia Sithole-Mataarise
LONDON, March 15 (Reuters) - Benchmark Japanese yen interbank rates jumped by the most in a day on Tuesday, reflecting rising counterparty risks as a deepening nuclear crisis in quake-hit Japan fueled risk aversion globally.
Some analysts said they expected yen interbank rates to grind higher but at a slower pace after the Bank of Japan offered to pump 5 trillion yen ($61 billion) into the banking system on Tuesday.
This followed a record injection of 15 trillion yen in same-day market operations and eased monetary policy further to support the economy recover from a triple blow of a massive earthquake, tsunami and nuclear emergency.
While euroyen futures <JPYIRS0#JEY:> edged higher after the BoJ moves, three-month yen Libor JPY3MFSR= fixed up at 0.20000 percent from 0.19250 percent, its highest since mid-October.
"As the power situation deteriorated today, and stock markets tumbled, it should not be surprising that this is reflected in (yen) Libor rates as risk will have risen and counterparty risk will have increased as losses look to be rising," said David Rea, an economist at Capital Economics.
"The greater the risk, and the greater the perceived loss to the economy and by extension the financial system, the greater the pressure on Libor. The Bank of Japan can, and undoubtedly will, do what it can to ensure there is liquidity, but this will not remove risk."
Signs of dollar strains in the Japanese market were largely muted for now with the gap of 3-month Tokyo interbank offered rate ZTIJPY3MD= over yen LIBOR JPY3MFSR= largely steady around 0.14 bps. This spread was at a record 20 bps in the aftermath of the 2008 global financial crisis.
ECB RATE HIKE BETS TRIMMED
In the euro zone, interest rate futures rallied, pushing their implied yields lower as traders scaled back how aggressively the European Central Bank will raise official borrowing costs as Japan's disaster and the Middle East conflict clouded the outlook for global growth.
Euribor futures <0#FEI:> were up three to 15 basis points across the 2011/2012 strip, with the sharpest moves at the back end of the curve.
"The market is really questioning whether the ECB can still come forward with a hike as equity markets are sliding," said Benjamin Schroeder, a strategist at Commerzbank.
"The global risks have grown with the Japanese earthquake, nuclear power plants disaster and the potential effects on the economic outlook," he said.
Overnight rates corresponding to the European Central Bank's next meeting in April EUIRP25O1=R have slid by 10 basis points from Thursday's peaks, as investors saw some risk the bank would back away from the strong signal it sent last week that rates would begin rising next month.
The market is now pricing in two interest rate hikes by the end of the year compared with three before the Japanese disaster [ECBWATCH]. Some analysts still think the ECB could move as early as April after ECB policymakers kept up their hawkish rhetoric. [ID:nECBQUOTES]
"The curve is pricing in a fair amount of expectation for April, so on balance both the analyst community and dealers are reluctant to price it out ... The more the situation in Japan continues, the more we will have to reassess that."
(Additional reporting by William James in London and Takahiro Okamoto in Tokyo; Editing by Ruth Pitchford)