Bank of Japan officials are set to begin selling the central bank's exchange-traded funds as early as next month. The process, aimed at avoiding market disruptions, is expected to unfold gradually over decades. This follows a decision made at a September policy board meeting.
Bank of Japan (BOJ) officials are likely to initiate the sale of the central bank's substantial exchange-traded fund (ETF) holdings starting as early as January 2025. According to individuals familiar with the matter, the assets will be offloaded gradually to prevent any disruption to financial markets. At the end of September, these holdings had a market value of ¥83 trillion ($534 billion) and a book value of ¥37.1 trillion.
The plan was established during a September policy board meeting, setting a sales pace of ¥330 billion annually based on book value. A straightforward calculation suggests the entire process could span around 112 years if this rate remains consistent. The BOJ's ETF portfolio has built up over years of monetary easing policies, making it one of the largest in Japan.
While specifics on the exact timeline and methods remain undisclosed by sources, the emphasis is on a measured approach. This initiative represents a key move toward normalizing Japan's monetary policy, though market observers express concerns about potential impacts on stock prices.
