ANZ eyeing Japan's Aozora or Tokyo Star-report - Reuters

(Adds bank comments, background)

* ANZ looking at buying a Japanese bank as part of Asia expansion

* Aozora majority owned by Cerberus; Tokyo Star owned by Lone Star, others

* Aozora shares jump 5.4 pct vs Nikkei's 1 pct rise

SYDNEY, Aug 29 (Reuters) - Australia and New Zealand Banking Group , Australia's fourth-largest lender, is looking at buying Japan's Tokyo Star Bank or Aozora Bank , the Australian Financial Review said in its Street Talk Column without citing any sources.

The report comes as U.S. investment firm Lone Star begins preparations to sell unlisted Tokyo Star Bank after it recently regained a stake in the midsize lender, which has total assets of about 2.2 trillion yen ($29 billion).

Aozora Bank is majority-owned by private equity firm Cerberus Capital Management and is valued at about $3.9 billion in market capital.

The paper did not specify any deal value.

Officials at Aozora Bank and Tokyo Star declined to comment.

ANZ, which is targeting Asia for growth and expects to get up to 30 percent of profits from the region by 2017, has retained law firm Nagashima Ohno for the deal with the bank's head of strategy and old Japan hand Joyce Phillips driving the deal, the paper said.

An ANZ spokesman declined to comment specifically on the report but said the bank was always looking at options to advance its regional strategy.

ANZ's chief executive, Michael Smith, the architect behind the Asian drive, said at the bank's annual shareholder meeting last year that the regional strategy was not just about Asia but the connectivity between Australia and Asia.

He added that China, Japan, Korea and India made up Australia's five largest trading partners.

Japan is also an attractive target given the excess deposits in the system which could eventually limit ANZ's reliance on offshore debt, the paper said.

Two advisers who have worked with ANZ previously said the bank was looking at Japan for expansion and stake buys but were unaware of any specific deal. They declined to be identified as they are not authorised to speak to the media.

Aozora Bank and Tokyo Star are much smaller players compared with Japan's top banks such as Mitsubishi UFJ Financial Group , which has total assets of about 206 trillion yen.

Tokyo Star was set up by Lone Star a decade ago, taking over the operations of a troubled local bank based in Tokyo.

Aozora Bank was formerly Nippon Credit Bank, which was effectively nationalised during Japan's financial crisis in the late 1990s.

Shares of Aozora rose 5.4 percent to 195 yen, outperforming a 1 percent gain in the benchmark Nikkei average . ($1 = 76.855 Japanese Yen) (Reporting by Narayanan Somasundaram, additional reporting by Taiga Uranaka and Wakako Sato in Tokyo; Editing by Ed Davies and Chris Gallagher)

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Japan Says G-7 Eyeing Market Turmoil as China Urges Rebuilding Confidence - Bloomberg

Japanese Finance Minister Yoshihiko Noda. Photographer: Haruyoshi Yamaguchi/Bloomberg

Aug. 19 (Bloomberg) -- K.C. Chan, Hong Kong's secretary for financial services and treasury, talks about the measures to boost cross-border investments between the city and mainland China. China will start an exchange-traded fund linked to Hong Kong stocks and expand sales of yuan bonds in the city, Li Keqiang, the front-runner to replace Wen Jiabao as China’s premier in 2013, said at an Aug. 17 economic forum in Hong Kong. Chan also discusses Hong Kong's economy and global financial markets. He speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

Japan called on Group of Seven nations to work closely to counter market turmoil and Asian officials sought to calm investors as stocks slumped on concern the U.S. recovery is faltering.

The G-7 needs “very close cooperation in coming weeks,” Japanese Finance Minister Yoshihiko Noda said in Tokyo, where the Topix index fell to a two-year low. Hong Kong financial official K.C. Chan urged investors to “stay calm” and not be “spooked by the market,” as the Hang Seng Index slumped 3.1 percent. In Beijing, Vice President Xi Jinping said his nation will avoid an economic hard landing.

Plunging equity markets are crushing consumer and business confidence, worsening the outlook for a global economy already hampered by the debt burdens of developed nations. Speculation that European banks may have insufficient capital and signs of weakness in the U.S. economy are helping to drive a stock rout that returned to Asia today.

“Business confidence is tailing off and global growth slowing, and Europe’s debt situation appears to be getting worse and worse without any coordinated policy response,” said Matt Riordan, who helps manage almost $6.6 billion in Sydney at Paradice Investment Management Pty. “The worst case is that you go back to a 2008-type financial crisis.”

In South Korea, the financial regulator urged insurers to boost capital in preparation for a potential crisis, and the benchmark Kospi index (KOSPI) plunged 6.2 percent, the most since 2008. South Korea’s exchange earlier said it temporarily halted program trading of shares on the Kospi after futures tumbled.

Asked how policy makers should respond to market turmoil, Noda referred reporters to an Aug. 8 pledge by G-7 finance ministers and central bank governors to “take all necessary measures to support financial stability and growth.” He didn’t specify any likely next step.

A past example of joint action is the intervention that temporarily weakened Japan’s currency after the nation’s March earthquake. Developed nations are hampered in stimulating their economies because of their debt burdens, and have limited or no room for interest-rate cuts after reductions that countered the financial crisis of 2008.

In Beijing, Xi told U.S. counterpart Joe Biden and business executives that global confidence must be rebuilt after “destabilizing factors” intensified. Xi said Biden briefed him on the steps America was taking to spur growth and tackle its deficit, with the Chinese leader expressing confidence in the U.S. economy’s resilience.

China’s benchmark Shanghai Composite Index closed 1 percent lower, down about 10 percent for the year.

In Hong Kong, Chan, the secretary for financial services and the Treasury, told Bloomberg Television that investors should “stay calm” and not be “spooked by the market.” Market volatility may persist as investors monitor the sovereign-debt crisis and the risk of a “double-dip” recession in the U.S., he said.

In Seoul, central bank official Min Sung Kee said that investors seem “too nervous” and are reacting “more than what I expected.” In a phone interview, Min, director general of the financial markets department, said that officials are “watching the markets 24 hours a day and we need to monitor the U.S. market more closely tonight.”

To contact the reporters on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net; Kate Andersen Brower in Washington at kandersen7@bloomberg.net

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