TOPWRAP 1-BOJ set to unveil plans to ease credit crisis

* BOJ expected to announce new moves to ease credit crisis

* Obama plan aims to help millions, stem foreclosures

* South Korea c.bank says foreign debt burden not heavy

* Germany eyes bank nationalisation as sector reels (For more on the financial crisis, click on

TOKYO, Feb 19 - The Bank of Japan was expected to announce moves to ease a corporate credit crisis on Thursday, as governments and central banks around the world search for ways to drag their economies out of a deepening recession.

U.S. President Barack Obama pledged up to $275 billion to help stem a wave of home foreclosures, while the German government approved a law to allow it to nationalise failing banks.

South Korea moved to calm fears its banks might fall under the weight of their foreign debts -- the latest credit worry to rattle emerging markets after euro zone banks were hit by concerns over their exposure to faltering East European economies.

Obama's highly anticipated plan for the U.S. housing market -- the epicentre of the global credit crisis and recession -- aims to keep as many as 9 million struggling families in their homes.

But the plan failed the impress the markets, with U.S. stocks touching a bear market low on Wednesday, after European shares slipped and Asian markets hit a February bottom.

"The biggest problem in the market ... is a major lack of confidence and disappointment that the current administration really hasn't done anything yet about the toxic assets held by banks," said Al Goldman, chief market strategist at Wachovia Securities in St. Louis.

Asian share markets were mixed on Thursday, while the yen was under pressure due to worries about the Japanese economy, which suffered its deepest contraction in more than three decades in the latest quarter.

BATTERED ECONOMIES

The Bank of Japan was expected to keep its key interest rate unchanged at 0.1 percent on Thursday, but may extend its buying of commercial paper beyond March.

The central bank was also expected to explain in more detail its plan to buy corporate bonds to funnel cash straight to companies as it looks beyond its policy rates for ways to revive an economy battered by the global economic downturn.

Japan has been hard hit by the crisis which was ignited by the U.S. housing market meltdown, and analysts see more pain ahead for the world's No. 2 economy due to its heavy dependence on exports and chronically weak domestic consumption.

The collapse of Japan's main export markets is pushing industrial giants such as Toyota, Sony and Panasonic deep into the red, prompting cuts in jobs and production and setting the economy on course for its longest recession in modern times.

South Korea said on Thursday that local banks' foreign debt burden was small compared with the country's more than $200 billion in currency reserves.

Speculation has been mounting that South Korean borrowers could struggle to pay their debts as early as next month, unable to raise dollars or persuade creditors to roll over the loans.

"We view the $24.5 billion in foreign debt due for the rest of this year as not a big amount when taking into account the foreign exchange reserves and other conditions," the Bank of Korea said in a statement.

The Finance Ministry also tried to play down concerns over debts, saying external liabilities had declined by about $40 billion in the fourth quarter of 2008, standing at 43 percent of gross domestic product, lower than levels in advanced economies.

Central European governments on Wednesday considered interest rates, market intervention and bailouts, with Hungary -- whose currency slid to an all-time low against the euro on Tuesday -- proposing the former Communist region agree to a joint package to support banks.

France's Societe Generale, Dutch bank ING and Germany's Commerzbank warned about a difficult year as concern grew over their exposure to Central and Eastern European markets.

The German government moved a step closer to nationalising mortgage lender Hypo Real Estate, overcoming free market qualms in the latest government intervention.

Other countries, including Britain and Ireland, have already seized control of banks, justifying their actions by pointing to the nature of the crisis and the need to protect taxpayers.