Mitsubishi UFJ Financial Group, Japan's largest bank, priced a share sale at 428 yen on Monday to raise up to 1.03 trillion yen ($11.6 billion) to help meet stricter global capital requirements.

The new share issue will be a record for a Japanese firm, and the price of 428 yen represents a 3.2 percent discount from Monday's closing share price of 442 yen.

Shares of Mitsubishi UFJ have fallen 12 percent in the past four sessions as investors sold ahead of the expected new issuance.

Investors are unlikely to return to Japanese banks until they see details of stricter capital requirements, said analyst Shin Tamura of Barclays Capital in Tokyo.

Are all the factors out? No, not yet, he said.

We have to wait for the announcement from the Basel Committee.

The Basel Committee on Banking Supervision, which is made up of central banking and regulatory officials from nearly 30 countries, is putting together a package of stricter financial regulations following the credit crisis.

The committee is expected to publish a draft of its reforms by the end of January.

Analysts have estimated that two other major Japanese banks, Sumitomo Mitsui Financial Group and Mizuho Financial Group, may have to follow Mitsubishi UFJ and also raise more funds.

Japan's index of banking stocks is down 22.5 percent so far this year, making it one of the worst performers among the 33 sectors on the Tokyo stock exchange.

Shares of Mitsubishi UFJ ended down 2.9 percent at 442 yen, before the announcement. The banking index declined 1.6 percent.

($1=88.82 Yen)

(Reporting by David Dolan; Editing by Michael Watson)