Bank of Japan Governor: It will take more than 100 years to sell the held ETFs, and the sale plan has the flexibility to stop if necessary

On Thursday morning, September 19, the Bank of Japan announced to maintain the benchmark interest rate unchanged and unexpectedly initiated a reduction in ETF (Exchange-Traded Fund) and J-REIT (Real Estate Investment Trust) holdings.

In the afternoon, Bank of Japan Governor Kazuo Ueda held a press conference, stating that if the sale of ETFs and Japanese real estate investment trusts proceeds at the established pace, it will take more than 100 years.

Wallstreetcn previously mentioned that the Bank of Japan began purchasing ETFs in 2010, particularly expanding sharply after the easing wave in 2013. Although it has stopped new ETF purchases after exiting large-scale stimulus last year, the related holdings have now reached 350 trillion yen.

He stated that after the necessary preparations are completed, the sale of ETFs will begin; the ETF sale plan has the flexibility to stop if necessary.

Regarding the impact of tariffs on the economy, Ueda stated that while tariffs are dragging down manufacturers' profits, there has been no observed impact of tariffs on Japan's capital expenditure, wages, and employment trends so far; the impact of trade policies on the foreign exchange market remains uncertain.

On inflation, Ueda stated that Japan's core inflation rate is still below 2% but is approaching the target; caution is needed regarding the downward price risks brought by tariffs.

Overall, Ueda stated that the Japanese economy is experiencing a moderate recovery, the price trend has not deviated from the second-half target, and real interest rates remain very low. If the bank's economic and price outlook materializes, it will continue to raise interest rates based on improvements.