Credit Ágricole: The JPY
At its October monetary policy meeting, the BoJ kept its policy rate unchanged at 1.25%. In its Outlook Report, it judged that underlying inflation had reached a level “generally consistent with the price stability target" of 2%. This assessment is unlikely to have any further bearing on the direction of BoJ monetary policy. The first reason is that the government has given the BoJ a dual mandate to achieve both “strong economic growth" and “stable inflation”. The second is that the government's growth targets have vet to be met, making greater consideration for achieving “strong economic growth" increasingly important. The BqJ reviewed the pace of its ETF sales. It increased the annual sales pace (at book value) from approx JPY330bn to approx JPY860bn (starting from Jan 2027). By year-end, the government is expected to formulate an implementation plan for Japan's growth strategy and announce the amount of concentrated investment over the next five years for the government's strategic investments. The unrealised gains on ETFs held by the BoJ are substantial, and this move appears to be a check a.qainst the.government using them as a source of funds for strategic investments.
At its October monetary policy meeting, the BoJ kept its policy rate unchanged at 1.25%. In its Outlook Report, it judged that underlying inflation had reached a level “generally consistent with the price stability target" of 2%. This assessment is unlikely to have any further bearing on the direction of BoJ monetary policy. The first reason is that the government has given the BoJ a dual mandate to achieve both “strong economic growth" and “stable inflation”.
The second is that the government's growth targets have vet to be met, making greater consideration for achieving “strong economic growth" increasingly important. The BqJ reviewed the pace of its ETF sales. It increased the annual sales pace (at book value) from approx JPY330bn to approx JPY860bn (starting from Jan 2027). By year-end, the government is expected to formulate an implementation plan for Japan's growth strategy and announce the amount of concentrated investment over the next five years for the government's strategic investments.
The unrealised gains on ETFs held by the BoJ are substantial, and this move appears to be a check a.qainst the.government using them as a source of funds for strategic investments.