UPDATE 1-Mitsubishi UFJ applies to set up U.S. holding company

(Adds details and analyst comment)

TOKYO, Sept 30 (Reuters) - Mitsubishi UFJ Financial Group (8306.T) said on Tuesday it has applied to set up a holding company in the United States, the latest move by Japan's top bank to increase its presence in the world's biggest economy.

The new status will allow the lender to expand beyond its current U.S. commercial banking business into equities and bonds.

Mitsubishi UFJ announced the plan a day after saying it would take a 21 percent stake in U.S. investment bank Morgan Stanley (MS.N), capitalising on the global credit turmoil to boost its presence.

"They want to be able to do both investment banking and commercial banking in the United States, but without a financial holding company status it is impossible to do both under the same company," said Hironari Nozaki, bank at analyst at Nikko Citigroup.

Often seen as the most conservative of Japan's big lenders, Mitsubishi UFJ is making an aggressive push into the United States.

On Monday, the bank said it will buy a 21 percent stake in Morgan Stanley (MS.N) for $9 billion. [ID:nN29373649] It has also taken full control of California lender UnionBanCal Corp UB.N, a deal it estimated at $3.5 billion.

Mitsubishi UFJ had previously been prevented from applying for the holding company status after receiving an administrative penalty from U.S. regulators in 2006 on charges of money laundering.

The bank said it received word on Tuesday that the penalty had been lifted. (Reporting by David Dolan and Yumiko Nishitani; editing by Sophie Hardach)