2012.06.01 18:00:07 BOT-M'bishi UFJ Pumps $2B Into Liquidity Reserve -Nikkei

TOKYO (Nikkei)--Bank of Tokyo-Mitsubishi UFJ has set up an overseas unit that will hold cash-equivalent U.S. government debt to help the bank maintain sufficient dollar liquidity, The Nikkei reported in its Saturday morning editions. The Mitsubishi UFJ Financial Group Inc. (8306.TO) lender placed $2 billion, or around Y160 billion, in the wholly owned unit Friday for bond purchases. It plans to pump in another $3 billion eventually. This new approach will help reduce funding costs. Banks usually top up their foreign-currency holdings by trading with each other. But interbank lending can break down in times of turmoil, as it did after the 2008 Lehman Brothers crash. Bank of Tokyo-Mitsubishi UFJ is broadening its options for ensuring liquidity to prepare for new financial shocks and expand overseas lending. (END) Dow Jones Newswires June 01, 2012 12:00 ET (16:00 GMT)