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Two Rate Hike Votes + Surprise ETF Selloff! The BOJ Stuns the Nikkei, Which Had Been Hitting Record Highs
① Although the decision to keep interest rates unchanged was in line with market expectations prior to the meeting, there were two surprising developments during this session; ② First, the vote on the interest rate decision within the Bank of Japan was 7 to 2, with two dissenting votes, and second, the Bank of Japan also announced that it would initiate a plan to reduce its holdings of ETFs and J-REITs.
The Bank of Japan mentions for the first time its plan to reduce holdings of ETFs.
Gelonghui, September 19 — The Bank of Japan maintained the benchmark interest rate unchanged in an effort to reduce economic and political uncertainties. It also announced that it would begin reducing its holdings of exchange-traded funds (ETFs). The Bank of Japan stated that it would start selling its holdings of ETFs and J-REITs, with the scale roughly equivalent to the value of stocks purchased from some banks in the 2000s. Once the necessary operational preparations are completed, the central bank will begin disposing of these assets, with an annual disposal amount of approximately 620 billion yen (based on market value). This marks the first time the Bank of Japan has mentioned plans to sell its held ETFs, which have a book value of about 37 trillion yen (approximately 2.5