Bank of Japan Holds Policy Rate at 0.50% and Approves ETF and J-REIT Disposal Plan

The Bank of Japan left its policy rate on hold at 0.50% by a 7–2 vote at its September 2025 monetary policy meeting, with board members Hajime Takata and Naoki Tamura proposing a rise to 0.75%. Alongside the rate decision, the board gave formal approval to a plan for the orderly disposal of exchange-traded funds and Japanese real estate investment trusts accumulated during the bank's extensive quantitative easing programme.

The bank had exited negative interest rate territory in early 2024 and subsequently raised the policy rate to 0.50%, representing the highest level in approximately seventeen years.

UNWINDING THE QE-ERA ASSET PORTFOLIO

During the quantitative easing era, the bank purchased ETFs and J-REITs as part of its monetary easing.

Under the newly approved framework, the BoJ will begin reducing these positions in a manner calibrated to minimise disruption to domestic equity markets and, in the case of J-REITs, to the real estate investment sector. The bank set a pace of about ¥330 billion a year for ETFs and about ¥5 billion a year for J-REITs, at book value, without a fixed completion date.