Japan's Nomura Holdings will set up an investment fund with China Investment Corp. and the two are expected to reach an agreement during Japanese Prime Minister Shinzo Abe's official visit to China this week, NHK reported on Tuesday.

The fund is expected raise about 100 billion to 200 billion yen (888 million to 1.7 billion US dollars) from institutional investors from both countries, according to Japanese media Nikkei.

The fund led by the two companies will also be funded by Japan's three megabanks – Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group – as well as Daiwa Securities Group, according to Nikkei.