Bank of Japan to Gradually Sell $500 Billion in ETFs Over Century-Long Plan

Highlights:

• Japan’s central bank will sell over $500 billion in ETFs starting January 2026.
• Slow annual sales of ¥330 billion could take approximately 112 years to finish.
• BOJ’s ETF holdings raise corporate governance concerns as the government influences market decisions.

The Bank of Japan (BOJ) plans to sell more than $500 billion in exchange‑traded funds (ETFs) starting next month, Bloomberg reported. To prevent sudden market stress, officials set a pace that avoids sharp reactions like those seen after previous policy shifts. 

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At the end of September, the Bank of Japan held ¥83 trillion ($534 billion) in ETF market value, with a book value of ¥37.1 trillion. To ensure stability, leaders plan to execute the program gradually, so global markets do not face shocks during trading volatility. The board confirmed the strategy in September. Under the current plan, the bank will sell ¥330 billion per year, which, if it maintains the pace, will take roughly 112 years to complete.

The Bank of Japan is expected to begin selling its ETF holdings as early as January, starting a gradual process that could take decades to complete. The holdings had a market value of ¥83 trillion ($534 billion) at the end of September and a book value of ¥37.1 trillion.…

— Wu Blockchain (@WuBlockchain) December 15, 2025

BOJ Plans Gradual ETF Sales Amid Market Stability Concerns

People familiar with internal discussions said the bank wants traders to barely notice this plan, similar to a previous phase when it sold stocks from weak banks. That earlier effort ended in July without triggering market upheaval.

The officials clarified that Japan’s rise in stock prices in recent years led to a surplus in the market value of EFTs over their recorded book value. Such a disparity makes it more precarious to time these sales to maintain market stability. The bank will consistently conduct these sales every month and will stop the implementation of this plan in case a major crisis such as the one in 2008 happens. Japan stated that Sumitomo Mitsui Trust Bank will handle EFT sales.

The BOJ’s ETF holdings make up about 7% of Japan’s stock market. They have helped keep markets liquid and prices stable. The gradual sales are to avoid sudden market shocks, especially as the Nikkei 225 and Topix hit record highs in 2025. Analysts call this a “century-long unwinding.” Even with sales, the BOJ will stay a major market player for many years. This may continue to create challenges for company governance.

BOJ Moves Stir Market Reactions and Corporate Governance Concerns

The market reacted in different ways to the BOJ announcement. The Nikkei 225 fell 1.8% at first but then recovered. Investors still have confidence in Japan’s stock rally. This shows the market is adjusting to less central bank support. However, risks remain. Rising bond yields and a weaker yen, caused by stimulus and less BOJ bond buying, worry some investors. The BOJ acts as both the central bank and a big shareholder. This makes it harder for it to stay neutral in the market.

The BOJ plans to slowly sell its ETFs, which may reduce support for Japanese stocks. When traditional markets face uncertainty, some investors often look for alternative assets. This could increase interest in crypto, including Bitcoin and crypto ETFs, as investors seek higher returns outside equities. Perhaps a slight movement towards crypto will be observed in fund flows. But since the BOJ does not invest in crypto, this will have an indirect impact primarily because of market sentiment and risk appetite.

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