The Bank of Japan is on course to finish offloading millions of dollars of stocks that it bought from beleaguered banks during the financial crisis two decades ago sooner than scheduled, a development that throws into focus the fate of its considerably larger holdings of exchange-traded funds.
The book value of share holdings acquired by the BOJ stood at ¥52.8 billion ($345 million) as of Feb. 10, according to the latest BOJ report on its account. Considering the pace of its monthly selling has consistently been about ¥10 billion over the past few years, the central bank could dispose of all the remaining assets in about five months. The bank said in 2015 it would finish selling down these shares by March 2026.
It’s a key consideration for investors. Many BOJ watchers are of the view that authorities wouldn’t likely sell the assets purchased from banks and ETFs simultaneously over concerns of potential market ructions. An early finish to the bank stock operations raises the possibility that the BOJ may telegraph its intention to sell ETFs by kicking off discussions with market participants on the process as early as this year.
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