The Bank of Japan plans to unload risky assets, focusing on selling ETFs to shrink its balance sheet, now 125% of Japan’s economy. With $251 billion in ETFs, the timing is uncertain due to political turmoil from the Prime Minister’s resignation. Deputy Governor Himino hints at progress in selling ETFs gradually.

BOJ started buying ETFs in 2010 as part of a stimulus program, but unlike JGBs, they don’t mature, requiring sale. Board member Masu stresses caution in selling ETFs due to market impact. Timing remains a sticking point, with analysts doubting a decision at the next policy meeting amid political uncertainty. Opposition parties eyeing BOJ’s ETF dividends for spending programs.

The decision on selling ETFs is crucial for the BOJ but faces challenges due to political uncertainties and potential criticism. The bank must navigate carefully to avoid unwanted attention from politicians wanting to tap into the proceeds. While progress is being made, the timing and method of selling ETFs remain key concerns for the BOJ.

Read more at Yahoo Finance: Analysis-BOJ signals final phase of Ueda’s stimulus unwind