Japan's Base Inflation Nears 2% according to BOJ's Ueda
Bank of Japan Announces Plans to Sell Off ETFs and J-REITs
In a significant development, the Bank of Japan (BoJ) has decided to sell its holdings of exchange-traded funds (ETFs) and Japanese real estate investment trusts (J-REITs) to the market. The announcement was made following a two-day policy-setting meeting, during which Governor Kazuo Ueda defended past purchases as 'necessary.'
The BoJ has amassed approximately 35 trillion yen worth of ETFs and about 2 trillion yen worth of J-REITs as part of its large-scale monetary easing programs. However, Governor Ueda emphasized the importance of selling off these assets 'bit by bit' to minimize market destabilization.
Despite the sale of these assets, the BoJ will hold interest rates steady. The decision to sell ETFs and J-REITs does not involve a change in interest rates and is a part of its broader monetary policy.
Governor Ueda stated that the country's underlying inflation is approaching the central bank's target of 2%. While the target of 2% underlying inflation is not yet reached, it is in the process of approaching, according to the governor.
The BoJ is expected to start selling ETFs and J-REITs early next year at the earliest. Governor Ueda estimates that it will take more than 100 years for the BoJ to sell off its ETFs and J-REITs purchased through its monetary easing policy.
In his statement, Governor Ueda defended the past purchases as 'necessary,' citing their role in supporting the economy during challenging times. The BoJ's decision to sell off these assets marks a shift in its monetary policy, but it continues to remain committed to its primary goal of achieving the 2% inflation target.
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