* Asian stock markets : tmsnrt.rs/2zpUAr4
* S&P 500 futures bounce in Asia, Nikkei jumps
* Investors relieved as Fed pledge eases bond market stress
* Dollar off peaks on promise of bottomless liquidity
* Factory surveys to show extent of economic damage
By Wayne Cole
SYDNEY, March 24 (Reuters) - Asian stocks rallied on Tuesday as the U.S. Federal Reserve's promise of bottomless dollar funding eased painful strains in financial markets, even if it could not soften the immediate economic hit of the coronavirus.
While Wall Street seemed unimpressed, investors in Asia were encouraged enough to lift E-Mini futures for the S&P 500 by 2.7% and Japan's Nikkei 4.7%. If sustained it would be the biggest daily rise for the Nikkei since late 2016.
Europe also looked a shade brighter as EUROSTOXXX 50 futures climbed 2.6% and FTSE futures rose 2.9%.
MSCI's broadest index of Asia-Pacific shares outside Japan jumped 3.5%, to more than halve Monday's drop.
South Korea's ravaged market climbed 5.2% after the government doubled a planned economic rescue package to 100 trillion won ($80 billion).
In its latest mold-breaking step, the Fed offered to buy unlimited amounts of assets to steady markets and expanded its mandate to corporate and municipal bonds.
The numbers were certainly large, with analysts estimating the package could make $4 trillion or more in loans to non-financial firms.
"What they did, more than just starting up some new programs, was to drive home they are willing to do whatever it takes," said Tom Porcelli, chief U.S. economist at RBC Capital Markets. "We would not call into question their resolve."
"We have every expectation that where a facility/program has some dollar limitation, that it is just the starting point," he added. "Upsizing is a foregone conclusion. The spigots are open. Now let's see how well they work."
The plan helped calm nerves in bond markets where yields on two-year Treasuries hit their lowest since 2013. Ten-year yields were at 0.82%, from last week's peak of 1.28%.
Still, analysts cautioned it would do little to offset the near-term economic damage done by mass lockdowns and layoffs.
Speculation is mounting data due on Thursday will show U.S. jobless claims rose an eye-watering 1 million last week, with forecasts ranging as high as 4 million.
Economists at JPMorgan expect claims to surge by a record 1.5 million and forecast a 14% annualised fall in U.S. gross domestic product for the second quarter. They see European GDP down almost 24% and Latin America 12%.
A range of flash surveys on European and U.S. manufacturing for March are due later on Tuesday and are expected to show deep declines into recessionary territory.
Surveys from Japan showed its services sector shrank at the fastest pace on record in March and factory activity at the quickest in about a decade.
While governments around the globe are launching ever-larger fiscal stimulus packages, the latest U.S. effort remains stalled in the Senate as Democrats said it contained too little money for hospitals and not enough limits on funds for big business.
The logjam combined with the stimulus splash from the Fed to take a little of the shine off the U.S. dollar, though it remains in demand as a global store of liquidity.
"The special role of the USD in the world's financial system – it is used globally in a range of transactions such as commodity pricing, bond issuance and international bank lending – means USD liquidity is at a premium," said CBA economist Joseph Capurso.
"While liquidity is an issue, the USD will remain strong."
For now, the prospect of massive U.S. dollar funding from the Fed saw the currency ease back to 110.22 yen from Monday's one-month top of 111.56.
The euro bounced 0.7% to $1.0799, up from a three-year trough of $1.0635. The dollar index slipped 0.4% to 101.720 and off a three-year peak of 102.99.
Commodity and emerging market currencies that suffered most during the recent asset rout also benefited from the Fed's steadying hand. The Australian dollar climbed 1.6% to $0.5925 and away from a 17-year low of $0.5510.
Gold surged in the wake of the Fed's pledge of yet more cheap money, and was last up 1.5% at $1,576.61 per ounce having rallied from a low of $1,484.65 on Monday.
There were also signs that gold metal itself was in short supply with the premium on exchange for physical blowing out.
Oil prices also bounced after recent savage losses, with U.S. crude up 82 cents at $24.18 barrel. Brent crude firmed 64 cents to $27.67.
Editing by Sam Holmes and Lincoln Feast.