UPDATE 2-U.S. sanction fears send Russian rouble to 2021 low, batter OFZ bonds

(Adds analyst comments, updates prices)

MOSCOW, March 24 (Reuters) - The Russian rouble hit a 2021 low against the dollar in jittery trade on Wednesday, while rouble-denominated OFZ treasury bonds hovered near a one-year low as the market braced for imminent U.S. sanctions against the country.

Russian assets have been under pressure since last week as markets prepared for a new round of U.S. sanctions over alleged election meddling, which Moscow has denied.

The rouble was little changed on the day at 76.36 against the dollar as of 1515 GMT after hitting 76.98, its weakest since mid-November.

The rouble gained 0.2% to 90.30 against the euro , hovering away from the 87 mark seen before the threat of new sanctions intensified.

Russia’s month-end taxes cushion losses in the rouble as they prompt export-focused companies to convert their dollar revenues to meet local liabilities.

U.S. President Joe Biden said last week that Russian President Vladimir Putin will “pay a price” and is expected to impose sanctions in coming days that could range from freezing the U.S. assets of Russians to curbing Moscow’s ability to issue sovereign debt.

“Geopolitical risk will remain a cloud for the time being, but we do not think economically-damaging measures by the U.S. are likely,” J.P. Morgan said in a note.

“The key risk for investors is a loss of access to the OFZ market due to U.S. sanctions,” the Institue of International Finance said.

The threat hammered Russian government bonds. Yields on 10-year benchmark OFZ bonds, which move inversely with their prices, were at 7.25% after jumping to 7.36% on Tuesday , their highest since last March.

The sell-off prompted the finance ministry to cancel its weekly OFZ bond auctions on Wednesday for the first time since August, citing increased market volatility.

Brent crude oil, a global benchmark for Russia’s main export, was up 4.4% at $63.44 a barrel, supporting Russian stock indexes after their losses of the past few days.

The dollar-denominated RTS index was up 0.2% to 1,437.8 points. The rouble-based MOEX Russian index rose 0.5% to 3,485.7 points, having hit an all-time high of 3,602.18 early last week. (Reporting by Andrey Ostroukh, Editing by Sherry Jacob Philips, Rashmi Aich and Hugh Lawson)