UPDATE 1-MUFG seen winning JAL credit card unit stake-paper

(Adds comments from source, details)

TOKYO, Jan 10 (Reuters) - Mitsubishi UFJ Financial Group (8306.T), Japan's biggest bank, is likely to win bidding for a large stake in Japan Airlines Corp's (9205.T) credit card unit, the Yomiuri newspaper reported on Thursday.

Mitsubishi UFJ has an advantage in the deal, said to be worth up to $450 million, because it has existing business ties with JALcard, a financial source said.

Other bidders include consumer credit company Credit Saison Co Ltd (8253.T), which is linked to Japan's second-biggest bank, Mizuho Financial Group (8411.T), and U.S. private equity firm TPG [TPG.UL].

TPG is viewed as the outside contender because it has weaker links to the credit card business, added the source, who spoke on condition of anonymity.

JAL, which is restructuring, wants to renew its fleet and pay down debt, is looking to sell up to 49 percent of its unlisted JALcard Inc and will probably reach a decision by the end of the month, the paper said.

A second round of bidding is set to take place on Friday, it said.

Sources have also said that JAL may be open to selling more than a 50 percent stake.

JALcard ranks sixth in Japan's credit card industry and is estimated by the media to have a market value of about 100 billion yen ($900 million). It also boasts a high percentage of wealthy customers compared with its rivals.

The airline, which has struggled with high oil and labour costs and has been hit by a string of safety mishaps, will seek capital of up to $1.4 billion from creditors and business partners, media have reported. ($1=110.00 Yen) (Reporting by Edwina Gibbs and Alison Tudor; Editing by Rodney Joyce)