Japan's Base Inflation Nearing 2%: Announcement from BOJ's Ueda
The Bank of Japan (BoJ) concluded its two-day policy-setting meeting on Friday without any changes to the interest rates. However, the BoJ's Policy Board made a significant decision to sell its holdings of exchange-traded funds (ETFs) and Japanese real estate investment trusts (J-REITs) to the market. BoJ Governor Kazuo Ueda defended the past ETF and J-REIT purchases as necessary, but emphasized the importance of selling off these assets 'bit by bit' to minimize market destabilization. He predicted that it will take over 100 years for the BoJ to sell off its ETFs and J-REITs purchased under the large-scale monetary easing policy. Ueda also stated that the underlying inflation in Japan is approaching the central bank's target of 2%. While it is still slightly below the target, this is a positive sign for the Japanese economy. Preparations for selling ETFs and J-REITs by the BoJ are expected to be completed early next year. Once these preparations are finished, the BoJ will begin selling ETFs and J-REITs, but the exact timing has not been specified. At a press conference following the policy-setting meeting, Ueda reiterated the BoJ's decision to sell ETFs and J-REITs, stating that this move is necessary to ensure long-term financial stability. He also mentioned that the BoJ will continue to closely monitor economic conditions and adjust its policies as needed. Overall, the BoJ's decision to sell ETFs and J-REITs marks a significant shift in its monetary policy. While the exact timing and details of the sales remain uncertain, the BoJ's commitment to long-term financial stability is clear.
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