The books close on Mitsubishi UFJ Financial Group’s $10 billion (£6.8 billion) share issue today amid euphoria and dread among traders. Euphoria because all the signs are that the new stock will be comfortably oversubscribed despite the recent global flight from market risk. Dread because once the issue is over, redundancies could sweep across Japan equity sales desks in London, New York, Hong Kong and Tokyo.

Nomura, which is a book-runner for the new issue, has already announced 1,000 job cuts in London and is understood to be gearing up to extend its purge next week across other offices in Asia.

The ranks of brokers in Tokyo have already suffered severe cuts, but trading floors across the Otemachi financial district are convinced that the axe is about to fall heavily once again. JPMorgan and Morgan Stanley, both book-runners for the UFJ issue, have cut jobs on their sales desks in recent days and domestic brokerage houses are feeling the pain from months of low trading by Japanese retail investors.

Those who have survived the financial crisis so far worry that next week will bring a wave of job losses as desks reduce their headcount before the usual holiday exodus of expatriate bankers. Macquarie and HSBC have made deep cuts to their Tokyo brokerage operations, and similar moves are thought likely by Deutsche Bank.

Since the announcement last month of Mitsubishi UFJ’s huge fund-raising plan, the deal has become a focus for retail and institutional investors in Japan and overseas: four banks, including Mitsubishi UFJ Securities itself, are book-running the international and domestic share issues. The fear creeping across trading floors, though, is that with the deal safely out of the way, low volumes and an absence of major IPOs on the horizon, managements will intensify cuts. In Tokyo, some fear that the redundancies could begin within hours of the close of trading tomorrow. In London, it is expected to begin after 5pm when the book officially closes.

The MUFJ issue has been condemned across the Japanese market as an ill-timed dilution of the per-share earnings of the bank and an avoidable drain on liquidity in a market desperate for new fund inflows. The need for additional capital in MUFJ arose because of its bullish move in September when it announced that it would supply $9 billion of capital to the troubled Morgan Stanley – a sum that, at the time, it felt able to fund with cash already held.

However, as the global funding environment contracted more violently, even Japan’s well-capitalised banks began to look overextended. As well as the combined trillion yen (£7.3 billion) in preferred stock and common shares being raised by MUFJ, nearly a dozen other Japanese banks and insurers are making a lunge for a combined Y3 trillion in fresh capital. Norinchukin Bank is seeking to raise about the same sum as MUFJ, but aims to do so by tapping Japan’s sprawling network of agricultural cooperatives, rather than going to the equity market.

MUFJ’s huge issuance is expected to force its biggest rivals, Mizuho and Sumitomo Mitsui, to make funding arrangements outside the stock market, too.

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