Bank of Japan to Begin Historic $534 Billion ETF Unwind Over a Century

The Bank of Japan (BOJ) is preparing to embark on one of the most gradual central bank asset sell-offs in history, planning to begin offloading its massive exchange-traded fund (ETF) holdings worth ¥83 trillion (approximately $534 billion) as early as January 2026.

The sales strategy is designed to be exceptionally slow and cautious, with officials targeting annual sales of roughly ¥330 billion. At this deliberate pace, the complete unwinding of the portfolio could take more than 100 years—specifically, an estimated 112 years if the plan remains unchanged. This approach is a direct effort to prevent market shocks and ensure financial stability as the central bank exits stimulus-era investments accumulated over previous decades.

The BOJ's ETF holdings have a significant disparity between market and book value. While the market value stood at ¥83 trillion at the end of September 2025, the book value is ¥37.1 trillion. Officials have emphasized they "will not dump these assets fast enough to shake markets," especially during a period of global investor skittishness. The plan was formally locked in during the BOJ's September 2025 board meeting.

The bank aims for the sales to feel "almost invisible" to the market, mirroring the successful, decade-long strategy it used to unload stocks purchased from weak banks in the 2000s, which concluded without incident in July 2025. The BOJ has also built in safeguards, stating the sales process would be halted if a systemic shock on the scale of the 2008 financial crisis were to occur.

To execute this monumental task, the BOJ has selected Sumitomo Mitsui Trust Bank, which won the auction to handle the selling program earlier in December 2025. The unwind begins against a backdrop of regional market volatility, with Asian indexes declining amid concerns over weak economic data from China and a pullback in AI-related stocks.