* To issue about 1 trillion yen in common shares-sources

* To use funds to meet tougher capital requirements-sources

* Issue at Friday closing price would trigger 17 pct dilution

* MUFG shares in US fall 7.8 pct on Nikkei report of offering (Updates with details, background)

By Taro Fuse and Emi Emoto

TOKYO, Nov 14 (Reuters) - Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research), Japan's largest bank, will issue about $11 billion in new shares to meet stricter capital requirements and boost lending in Asia, three sources familiar with the matter said.

The common share issue of roughly 1 trillion yen would mark a record for a Japanese financial firm, according to Thomson Reuters data.

Japanese banks have already raised $15 billion this year by issuing common shares, but have been expected to tap resurgent equity markets for more as regulators globally plan new rules requiring them to hold a thicker buffer of capital.

MUFG plans to issue the shares by the end of the year, the sources said, confirming an earlier report in the Nikkei newspaper, which pushed shares of the bank traded in the United States (MTU.N: Quote, Profile, Research) down nearly 8 percent.