BOJ Completes Sale Of Bank Stocks, Shifts Focus To ETFs

The Bank of Japan (BOJ) has completed the sale of stock holdings it acquired from distressed banks during Japan’s domestic banking crisis in the early 2000s and the subsequent global financial crisis, marking the end of a nearly two-decade-long process.

The BOJ’s smooth exit from these holdings is raising hopes that broader policy normalization might be achieved without disrupting financial markets. I Photo: Wikimedia Commons

Attention is now turning to the central bank’s much larger portfolio of exchange-traded funds (ETFs), Toru Fujioka reported for Bloomberg News.

As of July 10, the BOJ’s holdings of these bank shares had fallen to zero, down from ¥2.5 billion ($17.4 million) just 10 days earlier, according to its latest balance sheet.

The central bank reached this milestone well ahead of its self-imposed deadline of March 2026, although the timeline had already been expected due to a steady reduction of about ¥10 billion per month in recent years.

These assets were originally purchased as an emergency measure, well before the launch of the BOJ’s large-scale monetary easing program that Governor Kazuo Ueda is now gradually unwinding.

Between 2002 and 2010, the central bank acquired approximately ¥2.4 trillion ($16.3 billion) worth of stocks from private banks in two separate phases, in a bid to stabilize the financial system during periods of crisis—measures that were, at the time, considered extraordinary for a major central bank.

The BOJ’s smooth exit from these holdings is raising hopes that broader policy normalization might be achieved without disrupting financial markets, though experts caution that it will be a slow and complex process.