Subprime losses at Japan's Mizuho Financial Group have likely ballooned to more than $1.9 billion, a report said.

The losses may force the bank to cut its full-year forecast for a second time, the Yomiuri newspaper said.

Credit market turmoil may also require Japan's second-largest bank to inject more capital into its faltering brokerage unit Mizuho Securities, the paper said.

Mizuho is likely to take more than 200 billion yen ($1.9 billion yen) of losses on subprime investments, and perhaps as much as 250 billion yen, the Yomiuri said. That compares with the roughly 170 billion yen in losses the bank estimated in November.

Mizuho spokeswoman Masako Shiono declined to comment on the report. She also declined to say whether the bank would lower its forecast or inject more capital into Mizuho Securities.

The bank is due to report its nine-month earnings on Thursday.

Japanese lenders have largely avoided the massive losses on subprime investments that hit overseas banks. Earlier this month Mizuho said it would invest $1.2 billion in struggling rival Merrill Lynch, a deal that was seen as a major turnaround for Tokyo banking.

Still, Mizuho and other large Japanese banks have not escaped unscathed. It cut its full-year forecast in November by 13 percent, to 650 billion yen, citing losses on securitised products held by Mizuho Securities.

Mizuho has so far said it will pay about $1.4 billion yen to prop up the brokerage, which has fallen into the red and delayed a merger with brokerage Shinko Securities Co by four months, until May.

Mizuho president Terunobu Maeda acknowledged at a news conference in November that the bank was having a tough time pricing its subprime investments.

"The market is crashing and you can't accurately determine prices," Maeda said. Worries about subprime exposure helped send Mizuho's share price down 37 percent last year, pushing its market capitalisation below rival Sumitomo Mitsui Financial Group, a smaller bank in terms of assets. During the same period Tokyo's index of bank stocks IBNKS.lost 28 percent. - Reuters