UPDATE 1-Mizuho sells shareholdings to BOJ - Nikkei

* Corporate banking unit sells about Y1 bln of shares -Nikkei

* Analysts say move would be a token gesture

TOKYO/NEW YORK, March 26 (Reuters) - The corporate banking arm of Mizuho Financial Group Inc (8411.T) has sold about 1 billion yen ($10.3 million) of its shareholdings in other companies to the Bank of Japan, the Nikkei business daily said on Thursday.

The sale by Mizuho Corporate Bank would be the first to the BOJ by a major Japanese lender since the central bank last month resumed a programme to buy up shares held by banks to help cut their exposure to stock market fluctuations.

Mizuho declined to comment on the report, but analysts said the move looked like a token gesture. One billion yen is a pittance compared to second-ranked Mizuho's total shareholdings, valued at 2.93 trillion yen as of end-December.

"The small amount highlights the reluctance of banks to crystallize losses on their shareholdings at current levels," said Jason Rogers, a credit analyst at Barclays Capital. "This was never an optimal scheme for the banks."

The BOJ last month dusted off a scheme it implemented in 2002-2004 to encourage more bank lending, and pledged to buy up to 1 trillion yen in shareholdings through April 2010.

Japanese lenders often take stakes in corporate clients to cement business ties, making them vulnerable to share price falls. [ID:nT201766]

Equity held by Mizuho Financial shrank 41 percent in value in the year to December, and its three main banking arms booked a 136.5 billion yen loss on shareholdings in October-December. ($1=97.2892 yen) (Reporting by Mayumi Negishi in Tokyo and Gerald E. McCormick in New York; Editing by Richard Chang)