Bank of Japan ETF sale policy and fund allocation

The Bank of Japan announced plans to accelerate the sale of its Japanese equity exchange-traded funds (ETFs). Beginning in January 2027, the annual sale amount on a book value basis is scheduled to increase from approximately 330 billion yen to approximately 860 billion yen. This adjustment aims to represent roughly 0.1% of the Tokyo Stock Exchange Prime Market trading volume. The central bank stated it would distribute sales throughout the year to minimize market impact and reserved the authority to adjust or suspend volumes based on financial market conditions.

Following this decision, Prime Minister Sanae Takaichi announced that the proceeds from these ETF sales would be directed into a new economic security special account. The government intends to use these funds, which are expected to reach approximately 1 trillion yen annually due to rising stock prices, to support crisis management and growth sectors. To facilitate this, the government plans to issue bridge bonds to front-load the procurement of these funds, aiming to stimulate private investment in competitive sectors.