The Bank of Japan’s decision to begin reducing its ETF and JREIT holdings marks a significant shift toward policy normalization, with rate hike expectations rising for October 2025.
On September 19, 2025, the Bank of Japan revealed plans to unwind $250 billion in ETFs and JREITs it accumulated since 2010, signaling a potential shift toward monetary policy tightening. Governor Kazuo Ueda emphasized that the unwinding process would be slow, taking over a century to complete. The announcement coincided with a decision to maintain the 0.5% benchmark interest rate, though dissent within the BOJ raises expectations for a rate hike in October. Japan’s inflation and rising borrowing costs have further fueled market uncertainty, with the Nikkei falling and crypto markets dipping.