TOKYO - MITSUBISHI UFJ Financial Group and US investment bank Morgan Stanley have agreed to merge their brokerage units in Japan, media reports said on Friday.

Japanese public broadcaster NHK, citing no sources, announced plans for the merger but did not provide details.

Kyodo News agency, quoting sources familiar with the matter, said Mitsubishi UFJ, Japan's largest bank, was considering merging its securities unit with Morgan Stanley's brokerage operation in Japan.

Mitsubishi UFJ said in a statement on Friday that nothing had been decided. The Japanese bank declined to comment further.

Ms Mika Watanabe, a spokesman of Morgan Stanley in Japan, said, 'Nothing concrete has been decided.'

The reported move follows a deal announced last month under which Mitsubishi UFJ will buy a 21 per cent stake in Morgan Stanley for US$9 billion (S$13 billion), making Mitsubishi UFJ the American investment bank's top shareholder.

Morgan Stanley, along with Goldman Sachs Group, was one of the two remaining independent Wall Street investment banks until the two recently applied to become commercial banks that take deposits.

Wall Street is in a state of upheaval after poor investments in mortgage-backed securities led the US government to propose a US$700 billion rescue plan for the nation's banks.

On Thursday, Mitsubishi UFJ Trust and Banking, a unit of Mitsubishi UFJ Financial Group, said it would buy up to a 19.9 per cent stake in British investment firm Aberdeen Asset Management for around 40 billion yen (S$550 million). -- AP