Bank of Japan Signals Gradual Unwind of ¥37 Trillion ETF Portfolio

The Bank of Japan has begun laying the groundwork for its most delicate monetary maneuver in decades—unloading ¥37 trillion ($240 billion) in ETF holdings accumulated since 2010. Governor Kazuo Ueda's plan to normalize the central bank's bloated balance sheet, now equivalent to 125% of Japan's GDP, enters its final phase as policymakers seek to offload risk assets without destabilizing markets.

Deputy Governor Ryozo Himino's recent remarks suggest the BOJ may MOVE faster than anticipated. His reference to studying the two-decade stock disposal strategy used after the 2002-2010 market interventions signals a preference for gradual sales over bulk transfers. The political vacuum following Prime Minister Shigeru Ishiba's resignation adds complexity to timing considerations.