Japanese brokerage Nomura Holdings is in talks with Resona Holdings on a possible alliance that could involve Nomura purchasing 100 billion yen (US$815 million) worth of preferred shares in the country's fourth-largest bank, the Nikkei business daily reported on Friday.
Both companies said there was no truth in the Nikkei report.
The two firms have begun negotiations for a tie-up in the areas of investment trusts, retail customers and investment banking, the newspaper said.
The Nikkei report led to a brief rally in both shares but have since fallen back. As of midday, Nomura was down 0.2% at 2,400 yen, while Resona fell 0.4% to 287,000 yen. Tokyo's Nikkei 225 Average was lower.
Japanese brokers have been seeking ways to tap new pools of clients by forming closer ties with big banks as deregulation has brought down barriers between the two industries.
Also, Resona, Japan's fourth-largest lender, is accelerating its efforts to pay back its 2.3 trillion yen of public funds it got through government bailouts.
Resona President Seiji Higaki told Reuters in an interview on Thursday that the bank was considering a business tie-up with Dai-Ichi Mutual Life Insurance, which may include issuing 100 billion yen in preferred shares to the insurer.