[Digital Today reporter Seung-a Yoo (유승아)] The Bank of Japan (BOJ) plans to raise the pace of selling exchange-traded funds (ETFs) it holds by about 2.6 times. The estimated time needed to dispose of the holdings has been cut to 43 years from 112. It will spread sales over a long period to minimise market impact.

On Nov. 1 (local time), blockchain media outlet CryptoSlate reported that the BOJ decided on Oct. 30 to raise its annual ETF sales to 860 billion yen, from 330 billion yen. The revised sales plan takes effect from January 2027. The BOJ kept its short-term policy rate target at about 1.25 percent on the same day.

The expansion is meant to gradually unwind assets accumulated under its easing policy. The BOJ began buying ETFs in 2010 to support the economy and respond to deflation, and stopped new purchases in March 2024. Its existing holdings remain on its balance sheet and must be sold by finding actual buyers in the market.

The BOJ is raising the sales pace while maintaining a cautious stance to limit market shock. Unlike bonds, equity ETFs have no maturity, so holdings cannot be redeemed automatically. A sharp increase in sales volume over a short period could concentrate selling pressure, so the BOJ is focusing on securing appropriate prices while minimising market disruption and losses.

The annual sales volume of 860 billion yen is based on book value. Converted into actual market value, it is about 2.46 trillion yen. The BOJ estimated this at about 0.1 percent of trading value on the Tokyo Stock Exchange Prime market. That is about double the previous level of about 0.05 percent, but still limited relative to overall market turnover. The figures of 112 years and 43 years are also arithmetic estimates that divide holdings as of end-September 2026 by annual sales based on book value, and do not mean the actual completion date.

The step could indirectly affect the bitcoin market. The key link is the yen carry trade. If investors borrowed low-interest yen to invest in dollar-denominated assets such as bitcoin, a stronger yen would reduce the amount available to repay the loan when assets are converted into yen. If borrowing costs also rise, investors may have to add collateral or sell holdings. Bitcoin could become a target for selling in that process.

The BOJ's ETF sales and private investors' borrowing of yen are separate issues. It has not been confirmed whether rising yen funding burdens are currently triggering forced bitcoin selling, or how large any such selling might be.

In overseas securities investment statistics for Oct. 18 to 24 released by Japan's Ministry of Finance, Japanese investors were net sellers of 92.6 billion yen in foreign long-term bonds, but net buyers of 430.8 billion yen in overall foreign securities. That is why it is difficult to interpret sales of long-term bonds alone as meaning that Japanese funds are broadly exiting overseas markets.

Ultimately, the focus of the step is for the BOJ to shrink equity-type assets accumulated over a long period without market shock, while watching changes in yen funding conditions that may arise in the process. Whether higher yen borrowing burdens actually lead investors to cut positions will be a key variable in assessing the link to the bitcoin market.