The BOJ must define a strategy for its ETF holdings - not just its sales

Central bank needs to decide what to do with what they hold until everything is sold. Markets broadly expect the Bank of Japan to hold steady on its policy rate at a monetary policy meeting this week. However, the central bank’s announcement following its September gathering that it would begin selling its holdings of exchange-traded funds (ETFs) and real estate investment trusts (REITs) — both accumulated through years of purchases — should not be overlooked as a defining moment in its long experiment with unconventional monetary easing. Unwinding these holdings responsibly is not just a technical challenge but a signal to the world about the resilience of Japan’s institutional framework.