SecProbe.io

May 31, 2011
  Katsunori Nagayasu President and Chief Executive Officer Mitsubishi UFJ Financial Group, Inc. 7-1, Marunouchi 2-chome,  Chiyoda-ku Tokyo 100-8330 Japan
Re: Mitsubishi UFJ Financial Group, Inc.
Form 20-F for the year ended March 31, 2010 Filed August 16, 2010 Form 6-K  Filed April 21, 2011 File No. 000-54189
 Dear Mr. Nagayasu:
 We have reviewed your filings and have the following comments.  In some of our
comments, we may ask you to provide us with  information so we may better understand your
disclosure.
 Please respond to this letter within te n business days by providing the requested
information, or by advising us when you will provide the requested response.  If you do not believe our comments apply to your facts and circum stances, please tell us w hy in your response.
 After reviewing the information you provide in response to these comments, we may
have additional comments.               Form 20-F

 Risk Factors

 “Because a large portion of our assets are locat ed in Japan and our business operations are
conducted primarily in Japan, we may incur further losses if economic conditions in Japan
worsen”, page 9
 1. You have disclosed that your performance is particularly affected by the general
economic conditions of Japan.  Given that you are headquartered in and conduct a significant amount of business in  Japan, please explain to us the exposure that the recent

Katsunori Nagayasu
Mitsubishi UFJ Financial Group, Inc. May 31, 2011
Page 2
natural and nuclear events has had on your business and how it has (or will) impact your
operations.  Additionally, please tell us how your business co ntinuity plans discussed on
page 143 performed in the wake of these natu ral disasters and whet her any changes were
necessary to your plan s as a result.
 Item 4.  Information on the Company, page 19

 B.  Business Overview, page 22

 United States, page 37

Regulatory Reform Legislation, page 40

2. We note that you have extensive trading ac tivities, including proprietary trading
activities.  Based on the disclosures throughout  your filing, it is not  clear how much of
your foreign exchange and other trading revenu es were generated from your proprietary
trading business.  We believe that separate  quantification of your  proprietary trading
revenues, to the extent materi al, could provide useful info rmation to allow readers to
understand the significance of your proprietary tr ading activities to your  overall results of
operations.  Additionally, to the extent that this revenue st ream could be impacted by the
Volcker rule, you should also discuss the e ffects of that poten tial limitation on your
revenue stream.   Accordingly, please revise your future filings to separately disclose
your revenues earned from proprietary trading activities, if material.  In addition, if the
effects of the Volcker rule could potentially have a mate rial effect on your operations,
please clearly define what you consider to represent proprietary trading activities and
discuss changes you plan to implement, or have implemented, as a result of future
prohibitions or limitations on this type of activity in the future .

C.  Organizational Structure, page 41
 3. We note your disclosure on page 42 that you ow n 50% or less of th e ownership interest
and 50% or less of the proportion of voting in terest in the following subsidiaries, yet
these subsidiaries are consolidated into  your consolidate financial statements:

• The Master Trust Bank of Japan, Ltd.
• Mitsubishi UFJ Capital Co., Ltd.
• MU Hands-on Capital Co., Ltd.
• BOT Lease Co., Ltd.
• BTMU Participation (Thailand) Co., Ltd.

Please provide us with your accounting analysis  for each of these entities supporting that
that these entities are appr opriately consolidated in your consolidated financial
statements.

Katsunori Nagayasu
Mitsubishi UFJ Financial Group, Inc. May 31, 2011
Page 3

B. Liquidity and Capital Resources, page 80

Loan Portfolio, page 82

4. On page 85 you have disclosed that your  banking subsidiaries may grant various
concessions (modification of loan terms) to tr oubled borrowers at the borrower’s request.
To the extent that you have a material amount of loan modifications or restructurings not
accounted for as troubled debt restruct urings (TDRs), consider disclosing:

• The triggers or factors you review to identify these loans for modification or
restructuring;
• The typical length of the restructured terms;
• The success rates of these restructuring programs;
• Quantification of the amounts of loans re structured (by loan type and workout
strategy) in each period presented;
• Analysis supporting your conclusion that  these restructurings should not be
classified as troubled debt restructurings;
• How the loans are classified (perform ing vs. non-performing), whether they
continue to accrue interest, and the number of payments that must be made before
they are returned to accrual status;
• Impact of restructurings  on past due statistics;
• To the extent the restructuring is a “shor t-term” modification, the success rates of
these types of restructurings and whether th ese restructurings often result in more
permanent or longer-term restructuri ngs being made in the future; and
• Whether these loans are included in your ASC 450-20 (SFAS 5) or ASC 310-10
(SFAS 114) impairment analysis. If incl uded in the SFAS 5 analysis, whether a
materially different amount would ha ve resulted if included in the SFAS 114
analysis.

Item 11 – Quantitative and Qualitative Disclosu res about Credit, Market and Other Risk, page
142
 Credit Risk Management, page 144

 Borrower Rating, page 145

 5. We note that you classify your borrower ratings  into 15 grades based on evaluations of
their expected debt-service capability over the next  three to five years.  Please tell us the
assumptions made when determining such cap ability and the primary data reviewed to
determine these classifications.
6. Please provide us, and disclose in future f ilings, examples of your borrower ratings as
some of these definitions of these ratings app ear to be confusingly similar.  For example,
it is unclear of the differe nce between, borrower rating 1-2, defined as  a borrower

Katsunori Nagayasu
Mitsubishi UFJ Financial Group, Inc. May 31, 2011
Page 4
capacity to meet financial obligations deem high and stable and rating 1-3, defined as a
borrower capacity to meet financial obligati ons deemed free of problems.  Additionally,
please clarify whether there is  any correlation between your in ternal risk grading and the
risk classification system used by your primary bank regulators.
Item 15 – Controls a nd Procedures, page 161

7. We note your disclosure that management  has concluded that MUFG maintained
effective internal control over financial re porting as of March 31, 2010.  We also note
your disclosure that during the period covere d by the Annual Report, there has not been
any change in your internal control over financial reporting that has materially affected or is reasonably likely to materially affect your  internal control over  financial reporting.
Please tell us in more detail how you conclude d that the restatement discussed in Note 35
to your consolidated financial statements, whic h appears to relate to  improper elimination
entries and improper intercompany activities which could be control related did not
impact your conclusion that your internal co ntrols were properly operating as of March
31, 2010, or at a minimum did not require any ma terial changes be made to your internal
control over financial reporting during the year covered by the Annual Report.  As part of
your response, please tell us how, and w ho, identified the errors which required
restatement.

Selected Financial Data, page A-1

III.Loan Portfolio, page A-8
 Nonaccrual, Past Due and Restructured Loans, page A-10

 8. Pursuant to Guide 3 Item III.C.2, please clar ify, in future filings, whether you have any
potential problem loans that were not disclosed as nonaccrual, past due and restructured, but where known information about possible cr edit problems of borrowers (which are not
related to transfer risk inherent in cross- border lending activities) causes management to
have serious doubts as to the ability of such borrowers to comply w ith the present loan
repayment terms and which may result in disc losure of such loan s pursuant to Item
III.C.1.
Financial Statements and Notes

 Consolidated Statements of Equity, page F-10

 9. We note your rollforward of noncontrolling interests on page F-12.  Please explain in
further detail the types of activities included within the line item “decrease in noncontrolling interests re lated to exclusion of subsidiaries fr om consolidation.”

Katsunori Nagayasu
Mitsubishi UFJ Financial Group, Inc. May 31, 2011
Page 5  Note 1 – Basis of Financial Statements and Su mmary of Significant Accounting Policies, page F-
15
 Allowance for Credit Losses, page F-20

 10. We note your disclosure that the provision for credit losses, which is a charge against
earnings, is added to bring the allowance to  a level which, in management’s opinion, is
“adequate” to absorb probable losses inherent in the credit portfolio.   If true, please tell
us and revise future filings to state that th e allowance is at the amount that management
believes to be the “appropriate” amount to ab sorb probable losses i nherent in the credit
portfolio.
 Note 4 – Investment Securities, page F-36

 11. We note that you have ¥1,655,812 million of nonmarke table equity securities as of March
31, 2010, and that this balance has steadily  increased from ¥ 513,975 at March 31, 2008,
to ¥1,390,315 as of March 31, 2009 to ¥1,655,812 at Ma rch 31, 2010.  We also note that
you have recognized some impairment losses on th ese securities in each of the past three
years, and that you did not estimate the fair  value of some of th e investments at the
balance sheet dates as there were no identified  events or changes in circumstances that
may have a significant adverse e ffect on the fair value of the investment.  In light of the
growing significance of this investment portfolio, please tell us and enhance your
disclosures in future filings to address the following:

• Your disclosure indicates that you monitor the status of each investee
periodically, including credit ratings and changes in your sh are of the net assets in
the investees as compared to  the time of investment. Tell us the typical industries
in which these investments are made, whether the companies are located in Japan or elsewhere, how often credit ratings in formation is available given the equity
investments are nonmarketable, and whether this is an area of expected continued
growth.
• Tell us whether the impairments reco gnized on these nonmarketable equity
securities are concentrated within a few companies or industries.
• Tell us the types of, and frequency of, in formation received from the entities for
which you made the investment.
• Tell us more about the “commonly accepted valuation models” utilized for certain of these investments and tell us whethe r you backtest and va lidate the model as
you sell off your investments.
 Note 10 – Pledged Assets and Collateral, page F-58

 12. We note your disclosure that certain contra cts may not be specific about the secured
party’s right to sell or repl edge collateral, and that if you determine, based on available
information, that a financial asset “might not  be sold or repledged” you do  not report
those amounts separately in the consolidated ba lance sheets.  You also state that as of

Katsunori Nagayasu
Mitsubishi UFJ Financial Group, Inc. May 31, 2011
Page 6
March 31, 2010, you pledged ¥19,370 billion of assets that “may not be sold or repledged” by the secured parties.  Pleas e tell us whether the ¥19,370 billion includes
those situations where there is  judgment and the secured party “might” not be able to sell
or repledge the securities, or  just the ones where you have de termined for certainty based
on the contracts that the secured party is not able to sell or repledge the securities.   To
the extent the latter is true, please tell us the amount of th e securities for which you have
only determined the secured party “might” not be able to sell or repledge the securities.
Please also tell us whether the contracts for which the terms are uncle ar about the secured
party’s rights to sell or repledge collateral are base d in certain jurisdictions.

Note 17 – Preferred Stock, page F-76

 13.  We note your disclosure on page F-80 of the terms of the Class 11 Preferred Stock, and
the related reset provisions included with in the Class 11 Preferred Stock agreements.
Please tell us how you considered the guidance in ASC 815-40 in accounting for your Class 11 Preferred Stock.
 Note 28 – Trading Account Profits and Losses, page F-116

 14. We note your tabular disclosure of trading acco unt profits and losses by contract type and
the significant fluctuations in the account from year to year.  Please respond to the
following and expand your disclosures in future filings to address the following:

• Tell us and expand your disclosures to provi de further discussion of the types of
instruments that generate the trading pr ofits and losses by type of risk and how
those instruments affect the financial statement line items.  For example, discuss how interest rate contracts generate trading account pr ofits and losses (changes in
fair value which reflect X line item, and fee charged to customer, which affects X
line item, etc).
• Describe the significant drivers of tr ading account profits and losses.  For
example, discuss how much of the reve nue is driven by transaction fees (if
classified here) versus changes in fair value of the instruments.
• Tell us in more detail how trading acc ount profits and losses is generated by
customer demand, the steps you take to f ill the order, and how the associated
revenue line items are affected.  For exam ple, if a customer requests a foreign
exchange swap, discuss the types of fees  charged for the transaction, and whether
the trading account profits and losses you would recognize is the other side of the
swap transaction that the customer requested.
• Clarify how “foreign exchange derivativ e contracts” reflected in Note 28
reconciles to “foreign exchange gains (losses) on th e consolidated statements of
operations.

Katsunori Nagayasu
Mitsubishi UFJ Financial Group, Inc. May 31, 2011
Page 7   Note 31 – Fair Value, page F-121

 Assets and Liabilities Meas ured at Fair Value on a N onrecurring Basis, page F-129

 15. On page F-130, you have disclosed that you maintain an established process for
determining the fair value of collateral (i.e., real estate) dependent loans, using various
valuation techniques, including, but not limited to, discounted cash flow models.  Please
tell us the assumptions made when using this valuation technique and describe any
alternative procedures performed to validate the amounts determined using the discounted cash flow approach.

16. To the extent you use external appraisals  to determine the value of the underlying
collateral and you have a significant amount of  loans measured for impairment based on
such value, consider also disclosing:

• How and when updated third party apprai sals are obtained and how this impacts
the amount and timing of recording the loan loss provision and charge-offs;
• Whether you make any adjustment s to the appraisals and why;
• Type of appraisal, such as “r etail value” or “as is” value;
• How partially charged-off loans measured for impairment based on the collateral
value are classified and accounted fo r subsequent to receiving an updated
appraisal. For example, consider disclosing whether the loans are returned to
performing status or whether they remain as nonperforming;
• Typical timing surrounding the recognition of  loan as non-accrual and recording
of any provision or