🇯🇵 JAPAN PLANS TO SELL $500 BILLION WORTH OF ETFS, BUT EXTREMELY SLOWLY
🔸 Japan plans to gradually sell over $500 billion worth of ETFs held by its central bank.
🔸 The selling pace will be very slow, approximately $2–3 billion per year, meaning it could take over 100 years to sell them all. The slow selling aims to normalize monetary policy, shrink the balance sheet, and avoid shocking the market.
🔸 The reason is that during years of economic stimulus, the Japanese central bank purchased large quantities of ETFs, distorting stock prices and failing to accurately reflect the health of businesses or the economy, as the central bank became the largest buyer in the market.
🔸 The plan will be immediately halted if a major financial crisis occurs. Japan successfully applied this slow-motion approach when divesting bank stocks without causing market panic.
