The Bank of Japan is stepping up its exchange-traded fund divestments to 860 billion yen annually on a book-value basis, up from the previous pace of 330 billion yen. These accelerated offloads are expected to yield around 1 trillion yen ($6.33 billion) in extra yearly proceeds. The government plans to leverage these remittance gains to help fund national economic security programs without excessive borrowing. However, official transfers will only be settled once year-end accounting and budget procedures conclude under strictly independent central bank oversight.
Key points
The government intends to use central bank profit remittances to fund vital security inve…: The government intends to use central bank profit remittances to fund vital security investments while limiting new debt issuance.
The final amount transferred to state coffers will not be determined until fiscal year-en…: The final amount transferred to state coffers will not be determined until fiscal year-end budget procedures and calculations wrap up.
Official monetary choices and ETF sales schedules remain under the independent authority…: Official monetary choices and ETF sales schedules remain under the independent authority of the central bank regardless of state fiscal goals.
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TOKYO, Nov 10 : The Bank of Japan estimates that its accelerated sales of exchange-traded fund (ETF) holdings will generate about 1 trillion yen ($6.33 billion) in additional annual proceeds, Finance Minister Satsuki Katayama said on Tuesday.
Katayama's remarks come after Prime Minister Sanae Takaichi unveiled plans last week to tap proceeds from the BOJ's ETF sales to fund investment in areas deemed vital to Japan's economic security, as the government seeks new revenue sources without relying excessively on debt issuance.
The BOJ decided on October 30 to increase annual sales of its ETF holdings to 860 billion yen from 330 billion yen on a book-value basis. A portion of net profit the central bank reaps each year, including from the ETF sales, is paid to state coffers.
"The BOJ has indicated additional proceeds of roughly 1 trillion yen, but the exact amount that will be remitted to the government will depend on fiscal year-end calculations and budget procedures, so we can't say precisely how much it will be," Katayama said.
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