Bank of Japan starts gradual policy shift

Last month, the Bank of Japan (BoJ) decided to keep interest rates at 0.5%, despite two board members calling for an increase. The BoJ continued its plan to slow the pace of reducing its Japanese government bond purchases in 2026. It also revealed plans to sell its holdings of ETFs and REITs, which were acquired during its battle with deflation. However, the Bank’s sale of ETFs is mainly symbolic, with a planned pace of JPY 330 billion per year, meaning it would take over a century to liquidate these holdings. A gradual approach to sales would meet its aims of avoiding market disruption and...