Overview

• The Bank of Japan announced it will begin selling ETFs accumulated during years of large-scale easing, marking a further step in policy normalization.
• At the September 19 meeting, the policy rate was maintained around 0.5% even as internal dissent called for a faster increase.
• The new-issue 10-year JGB yield rose to 1.640%, up 0.045 percentage point, reaching its highest level in about two weeks.
• Tokyo shares whipsawed after the decision, with the closing level down 257 yen and intraday losses briefly exceeding 800 yen.
• Reporting on the exit plan indicated a full unwind of the BOJ’s ETF holdings could take more than a century due to market capacity constraints.