Statement on Monetary Policy : Bank of Japan
Central bank: boj | Type: statement | Date: 2025-09-19

1
September 19, 202 5
Bank of Japan

Statement on Monetary Policy

1. At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided, by
a 7-2 majority vote, to set the following guideline for money market operations for the
intermeeting period: [Note]
The Bank will encourage the uncollateralized overnight call rate to remain at around 0.5 percent.
2. With regard to exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs)
it holds, the Bank decided, by a unanimous vote, to sell these assets to the market in accordance
with the fundamental principles for their disposal, which include the principle to avoid inducing
destabilizing effects on the financial markets. The scale of the sales will generally be equivalent
to that for the "stocks purchased from financial institutions" (see Attachment).1,2
3. Japan's economy has recovered moderately, although some weakness has been seen in part.
Overseas economies have grown moderately on the whole, although some weakness has been
seen in part, reflecting trade and other policies in each jurisdiction. Exports a nd industrial
production have continued to be more or less flat as a trend, although there has been some
front-loading and a subsequent reactionary decline, due to the increase in U.S. tariffs. Corporate
profits have remained at high levels on the whole, a lthough downward effects due to tariffs
have been seen in manufacturing. Business fixed investment has been on a moderate increasing
trend. Private consumption has been resilient against the background of an improvement in the
employment and income situation, despite weakness in consumer sentiment due to the impact
of price rises and other factors. Housing investment has been relatively weak. Public
investment has been more or less flat. Financial conditions have been accommodative. On the
price front, with moves to pass on wage increases to selling prices continuing, the year-on-year
rate of increase in the consumer price index (CPI, all items less fresh food) ha s been in the
range of 2.5-3.0 percent recently, due to the effects of the rise in food prices, such as rice prices,
and other factors. Inflation expectations have risen moderately.

1 In order to ensure the stability of the financial system, the Bank purchased stocks from financial institutions
from 2002 to 2004 and from 2009 to 2010. Thereafter, the Bank sold the purchased stocks at a constant pace,
completing their disposal in July 2025.
2 The Bank will also discontinue the ETF lending facility, which was introduced in December 2019, given
factors such as the current usage of the facility.
2
Japan's economic growth is likely to moderate, as trade and other policies in each jurisdiction
lead to a slowdown in overseas economies and to a decline in domestic corp orate profits and
other factors, although factors such as accommodative financial conditions are expected to
provide support. Thereafter, Japan's economic growth rate is likely to rise, with overseas
economies returning to a moderate growth path. With rega rd to the CPI (all items less fresh
food), the effects of the recent rise in food prices , such as rice prices , are expected to wane.
Meanwhile, underlying CPI inflation is likely to be sluggish, mainly due to the deceleration in
the economy. Thereafter, however, underlying CPI inflation is expected to increase gradually,
since it is projected that a sense of labor shortage will grow as the economic growth rate rises,
and that medium - to long -term inflation expectations will rise. In the second half of the
projection period of the July 2025 Outlook for Economic Activity and Prices, underlying CPI
inflation is likely to be at a level that is generally consistent with the price stability target.
There are various risks to the outlook. In particular, it remains highly uncertain how trade and
other policies in each jurisdiction will evolve and how overseas economic activity and prices
will react to them. It is therefore necessary to pay due attention to the impact of these
developments on financial and foreign exchange markets and on Japan's economic activity and
prices.

[Note] V oting for the action: UEDA Kazuo, HIMINO Ryozo, UCHIDA Shinichi, NOGUCHI Asahi,
NAKAGAW A Junko, KOEDA Junko, and MASU Kazuyuki . V oting against the action: TAKATA
Hajime and TAMURA Naoki. Takata Hajime considered that there had been a shift away from the
deflationary norm and the price stability target ha d been more or less achieved. Tamura Naoki
considered that, with risks to prices becoming more skewed to the upside, the Bank should set the policy
interest rate a little closer to the neutral rate. They proposed that the Bank set the guideline for money
market operations as follows: the Bank would encourage the uncollateralized overnight call rate to
remain at around 0.75 percent. The proposals were defeated by majority votes.
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Attachment

Disposal of ETFs and J-REITs

At the Monetary Policy Meeting (MPM) held in March 2024, the Policy Board of the Bank of Japan
changed the monetary policy framework, judging that it was within sight that the price stability
target of 2 percent would be achieved in a sustainable and stable manner. As part of the change, the
Bank decided to discontinue purchases of exchange -traded f unds (ETFs) and Japan real estate
investment trusts (J-REITs). Thereafter, the Bank has considered the details of the disposal of these
assets.
The "Principal Terms and Conditions for Purchases of ETFs and J -REITs" lays out fundamental
principles for the disposal of ETFs and J-REITs as follows: the Bank should (1) dispose these assets
for adequate prices, taking into account the situation such as the condition of the ETF or J -REIT
market, (2) avoid incurring losses as much as possible, and (3) avoid inducing destabilizing effects
on the financial markets as much as possible.
Based on these fundamental principles and its experience of the smooth conduct of sales of the
"stocks purchased from financial institutions," the Bank decided to sell its holdings of ETFs and J-
REITs for the time being at a scale generally equivalent to that of the sales of the "stocks purchased
from financial institutions" (the sales amounts of ETFs and J -REITs will account for about 0.05
percent of the trading values in the markets) as described below.
1. The Bank will sell ETFs to the market at a pace of about 330 billion yen per year, based on the
prices formed in the exchange market.3
2. The Bank will sell J-REITs to the market at a pace of about 5 billion yen per year, based on the
prices formed in the exchange market.4
3. Under the pace of sales described above, the Bank will sell each ETF and J-REIT at the amount
approximately proportionate to the share of each asset in its holdings, with consideration to
spreading out the timing of the sales.

3 The sales amount is based on book value. Based on market value, the amount is about 620 billion yen as
of the end of March 2025, which is roughly equivalent to the annual sales amount of the stocks purchased
from financial institutions. (The sales amount of ETFs accounts for about 0.05 percent of the trading value
in the Tokyo Stock Exchange Prime Market.)
4 The sales amount is based on book value. Based on market value, the amount is about 5.5 billion yen as of
the end of March 2025. (The sales amount of J-REITs accounts for about 0.05 percent of the trading value in
the Tokyo Stock Exchange REIT Market.)
4
The Bank will select a trustee, who will conduct the disposal of ETFs and J -REITs. The disposal
will begin once necessary operational preparations are completed (see Annex for the "Basic
Principles for Disposal of ETFs and J-REITs").
The pace of sale s may be modified at future MPMs after the start of the disposal of ETFs and J -
REITs, based on the fundamental principles and the experience from the sales to be conducted.

5
Annex

Basic Principles for Disposal of ETFs and J-REITs

Pursuant to the provisions of Paragraph 8. (3) of the "Principal Terms and Conditions for Purchases
of ETFs and J -REITs," the basic principles for the disposal of exchange -traded funds (ETFs) and
Japan real estate investment trusts (J-REITs) shall be as follows:
1. Framework of disposal
ETFs and J-REITs shall be disposed by means of sales to the market, based on the prices formed
in the exchange market.
2. Method of sales
(1) Details of sales of ETFs and J-REITs shall be as follows:
(a) ETFs shall be sold at a pace of about 330 billion yen (book value basis) per year, with
consideration to spreading out the timing of the sales.
(b) J-REITs shall be sold at a pace of about 5 billion yen (book value basis) per year, with
consideration to spreading out the timing of the sales.
(c) Under the pace of sales stipulated in (a) and (b), the sales amount of each ETF and J-
REIT shall be approximately proportionate to the share of each asset in the Bank's
holdings, although the Bank shall set a limit to the total number of units sold per
business day for each J-REIT, taking into account the market liquidity of each J-REIT.
(2) Under the set of principles stipulated in (1) above, the trustee may temporarily adjust the
amount of sales within the range set in prior consultation with the Bank, in response to
changes in the condition of the financial markets. The trustee may suspend the sales,
especially in the event of a considerable fall in relevant price indexes.
(Supplementary Provision)
The basic principles shall become effective on the date determined by the Governor.
Reference
Meeting hours:
Thursday, September 18: 14:00-15:37
Friday, September 19: 9:00-12:40
Policy Board members present:
UEDA Kazuo, Chairman (Governor)
HIMINO Ryozo (Deputy Governor)
UCHIDA Shinichi (Deputy Governor)
NOGUCHI Asahi
NAKAGAWA Junko
TAKATA Hajime
TAMURA Naoki
KOEDA Junko
MASU Kazuyuki

[Others present]
September 18
From the Ministry of Finance:
MAEDA Tsutomu, Deputy Vice-Minister for Policy Planning and Coordination
(14:00-15:37)
From the Cabinet Office:
HAYASHI Sachihiro, Vice-Minister for Policy Coordination (14:00-15:37)
September 19
From the Ministry of Finance:
MAEDA Tsutomu, Deputy Vice-Minister for Policy Planning and Coordination
(9:00-12:04, 12:16-12:40)
From the Cabinet Office:
SETO Takakazu, State Minister of Cabinet Office (9:00-12:04, 12:16-12:40)
Release dates and times:
Statement on Monetary Policy -- Friday, September 19 at 12:47
Summary of Opinions -- Tuesday, September 30 at 8:50
Minutes of the Monetary Policy Meeting -- Wednesday, November 5 at 8:50