BOJ Unloads ETFs and Holds Rates Steady at 0.5%

The Bank of Japan’s policy board voted unanimously Friday to begin unloading about ¥335 billion ($2.4 billion) a year of exchange-traded funds (ETFs) and Japan real estate investment trusts, Francis Tang reported for the Japan Times.

The BOJ started purchasing ETFs in 2010 as part of its monetary easing policy.

Stocks dropped, with the benchmark Nikkei 225 stock average falling about 1%, and the yen strengthened immediately after the announcement of the move, which will help reduce the size of the central bank’s balance sheet.

The bank held rates steady at 0.5%.

The BOJ started purchasing ETFs in 2010 as part of its monetary easing policy. Purchasing volume was greatly expanded under former BOJ Governor Haruhiko Kuroda, and as of this month, the book value of central bank ETF holdings was ¥37.1 trillion.