Japan's central bank will sell its stock funds about 2.6 times faster from January 2027. Even at the new pace, its own calculation puts the exit at about 43 years, down from 112. The yen-funded trades that finance some Bitcoin purchases could be a channel of exposure if investors face pressure to sell.
The Bank of Japan has decided to sell its stock funds about 2.6 times faster than usual, cutting the estimated time needed to dispose of them from 112 years to 43. The bank held its overnight interest-rate target around 1.25% on Oct. 30 while approving the faster disposals from January 2027.
Those figures come from the BOJ's own calculation, which divides its end-September holdings by annual sales. They show how long a policy can outlast the decision to end it.
Faster sales, still decades of ownership
The new pace is about ¥860 billion annually at book value, up from ¥330 billion. Using the relationship between market prices and book values in ETFs it sold during January through September, the bank estimates that the new pace corresponds to about ¥2.46 trillion at market value.
Even so, the bank expects the revised sales to represent roughly one-thousandth of market trading value, based on Tokyo Stock Exchange Prime Market activity from January through September. Officials say sales since January have gone smoothly, with no major effect on the market.
The 43-year estimate assumes a constant book-value sales pace, so it is an arithmetic estimate, not a completion forecast. The bank can also adjust or suspend disposals when market conditions warrant it.
How the BOJ ended up with the holdings
The BOJ brought equity funds into its monetary easing program in 2010, when it wanted to encourage investment in an economy struggling with weak demand and deflation. It ended new ETF purchases in March 2024, but that left the existing investments on its balance sheet.
An ordinary equity ETF has no maturity date, so the bank cannot wait for the portfolio to expire. It needs actual buyers, and its disposal rules require seeking appropriate prices.
Where Bitcoin comes in
CryptoSlate describes a route from Japanese monetary policy to Bitcoin through the yen carry trade, a strategy it says has financed large Bitcoin purchases for years. Traders who borrow yen and buy unhedged dollar-denominated assets owe yen debt against an asset priced in a foreign currency.
If the yen strengthens, converting the asset back produces fewer yen to repay the loan. Investors who need cash can sell other holdings, including Bitcoin.
The source cautions that it cannot know whether this is happening now or at what scale. The BOJ's ETF program and private investors' financing are different things, even if the same market currents can affect both.
Source: CryptoSlate
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