* EU oks 500 bln euro emergency fund to fend off debt crisis
* With IMF contribution loan package could reach $1 trillion
* Euro rises 1.3 percent but off early highs
* Asia stocks up 2 pct on hopes plan will restore confidence
* Major central banks offer liquidity support to ease strains
* Markets want more details on aid, long-term worries remain
By Umesh Desai
HONG KONG, May 10 (Reuters) - The euro rose and Asian stocks jumped on Monday after the European Union and IMF carved out an emergency loan package of up to 750 billion euros ($1 trillion) to keep Greece's debt crisis from spreading through the euro zone.
The size of the package and an unexpected pledge by the European Central Bank to buy euro zone bonds if needed gave investors some confidence to return to riskier assets such as stocks, though questions remained about how the scheme would work.
Major global central banks moved swiftly to support Europe, re-establishing dollar swap facilities used during the 2007-2008 financial crisis to help ease strains on financial markets and ensure there was enough liquidity to keep global credit markets from seizing up again.
"These measures are a game changer in the near to medium term," said Dariusz Kowalczyk, chief investment strategist for SJS Markets, adding the aid package was big enough to deter speculation in the short term about Greek debt default.
The euro rose as high as $1.2950 on news of the deal before slipping back after the ECB abandoned its resistance to full-scale purchases of euro zone government and private bonds.
While some analysts had urged the central bank to push such a financial "nuclear button" to defuse the escalating debt crisis, others said buying bonds could be tantamount to printing money to finance Greece's fiscal deficit.
By late morning, the single currency was up 1.3 percent on the day at $1.2920 and was 1.5 percent higher against the yen at 118.55 yen
The MSCI world stock index rose 0.8 percent, with the MSCI Asia ex-Japan index up 2 percent and Japan's Nikkei up 1.6 percent.
U.S. S&P futures jumped 2.7 percent.
Kowalczyk said global risky assets -- equities, commodities and emerging market assets -- would be boosted by the latest support measures but added the euro will soon slip again because of the liquidity boost provided by ECB.
Financial markets have been punishing heavily indebted euro zone members, threatening to plunge them into the same sort of crisis as Greece, which could jeopardise the nascent global economic recovery.
The new safety net was meant to protect other countries with bloated budgets, such as Portugal, Spain and Ireland.
Jitters over euro zone finances have battered global markets as investors dumped riskier assets for safer ones such as the U.S. dollar, creating fears of dollar shortages in some countries and driving up dollar funding costs.
"While the ECB's intervention (in bond markets) might attract bad press regarding its mandate and independence, we believe that this was necessary to short circuit the negative feedback loop which was getting more and more threatening for the global economy," the Royal Bank of Scotland said in a research note.
"Sceptics will probably argue that this does not solve the medium term debt overhang issues plaguing the periphery (other weak euro zone countries). However they won't deny that this will give them a chance to implement some fiscal consolidation plans to restore market confidence in the sustainability of public finances in the euro area."
Before the European announcement, data from the Commodity Futures Trading Commission showed euro sceptics' bets against the common currency hit a record high in the week ending May 4.
Oil rose 2.3 percent to $76.86 a barrel on hopes that the EU deal will prevent broader damage to Europe's economy which would have dampened energy demand.
Gold softened to $1,198.20 an ounce, down from a near record-high of $1,213.35 hit Friday.
The U.S. dollar was firmer against the yen at 92.61 and well off Friday's five-month lows of 88.00. It was down 1 percent against a basket of major world currencies
U.S. Treasuries were broadly weaker amid optimism about the plan, adding to Friday's losses after the U.S. Labor Dept reported larger-than-expected employment gains in April, suggesting the economic recovery was well underway. (Additional reporting by Koh Gui Qing; Editing by Kim Coghill) (To read Reuters Global Investing Blog click on http://blogs.reuters.com/globalinvesting; for the MacroScope Blog click on http://blogs.reuters.com/macroscope; for Hedge Fund Blog Hub click on http://blogs.reuters.com/hedgehub)