MUFG JV excluded from more bond issues after market manipulation: DealWatch

FILE PHOTO: A logo of the Mitsubishi UFJ Financial Group Inc. (MUFG) is seen between pedestrians outside its headquarters in Tokyo, Japan, May 15, 2015. REUTERS/Yuya Shino/File Photo

TOKYO (Reuters) - A joint venture of Mitsubishi UFJ Financial Group Inc 8306.T and Morgan Stanley MS.N has been dropped as manager of bond issuances by some local governments after it was reprimanded for market manipulation, sources told Thomson Reuters DealWatch.

The move comes a day after sources revealed that Mitsubishi UFJ Morgan Stanley Securities Co Ltd had been dropped from managing issuances by Toray Industries Inc 3402.T, KDDI Corp 9433.T and Tokyo Gas Co 9531.T.

It has now also been dropped as manager of issuances by the city of Kyoto, Tokushima Prefecture in western Japan and the Japan Housing Finance Agency, people with direct knowledge of the matter said on Tuesday.

A spokesman at the JV said it took its clients’ decisions seriously and would work on regaining their trust.

“It is a matter for a customer to decide, and we have no further comment,” he said.

The Securities and Exchange Surveillance Commission on Friday recommended the Financial Services Agency fine the brokerage around $2 million, saying one of its dealers placed both buy and sell orders in August for a 10-year Japanese government bond futures contract without intention to execute.

The dealer aimed to create the impression of strong interest for the contract and the brokerage gained 1.58 million yen from related transactions, the watchdog said.

Reporting by Naoyuki Katayama of Dealwatch, additional reporting by Thomas Wilson; Editing by Himani Sarkar