TOKYO - THE Bank of Japan said on Thursday it had injected 1.5 trillion yen (S$20.6 billion) into money markets as financial markets saw more turbulence.

It was the third consecutive day the Japanese central bank has made an emergency offer of funds.

The latest injection brought the amount of funds the bank pumped into money markets to seven trillion yen since Tuesday.

The world's central banks have pumped hundreds of billions of dollars into money markets to ensure the supply of funds does not dry up since the collapse of US investment bank Lehman Brothers.

The US government bailout of major insurer American International Group (AIG) has failed to quell worries over the global financial system, with stock markets around the world hit by a fresh round of selling.

The Tokyo Stock Exchange's benchmark Nikkei-225 index was down about three per cent in early trading on Thursday.

Bank of Japan governor Masaaki Shirakawa on Wednesday hailed the US bailout of AIG, noting his own experiences in the central bank in the 1990s when Japan was accused of being too tepid in fixing its financial sector. -- AFP