Japan’s central bank is expected to begin selling its huge holdings of exchange-traded funds as early as this month, according to Bloomberg, citing people familiar with the matter.
The Bank of Japan made the decision at its policy board meeting last September and will offload the funds little by little, selling 330 billion yen (US$2.1 billion) a year based on book value to avoid roiling markets, the news agency says in a report on January 8.
Data on the central bank’s website shows that its ETF portfolio was valued at 83 trillion yen or $534 billion at the end of September.
Bloomberg estimates that it will take 112 years to offload the entire portfolio if the BOJ keeps the planned pace of selling unchanged.
“The central bank expects to keep a steady pace of monthly sales. There is no change in their stance of minimising disruption in the market,” according to the people familiar with the matter quoted in the report.
The BOJ began to purchase ETFs in 2010 to fight deflation and stabilise markets after the global financial crisis. The planned ETF sales come after the central bank began raising interest rates in March 2024 after a long period of zero to negative rates.
Spokespersons for the BOJ did not immediately respond to questions from Asia Asset Management.
