Japan PM Takaichi Plans to Direct BOJ ETF Sale Proceeds Toward Economic Security Spending

Japanese Prime Minister Sanae Takaichi has outlined plans to channel revenue from the Bank of Japan's accelerated ETF disposals into investments critical to Japan's economic security. Takaichi described the proceeds as a reflection of Japan's economic growth and said they should be recycled to generate further growth and strengthen the country's economic cycle.

The BOJ announced it would more than double its annual ETF sales to 860 billion yen ($5.5 billion) on a book-value basis from January, up from the current 330 billion yen. The faster pace would cut the estimated time needed to complete the full portfolio disposal to roughly 43 years from 112 years, and analysts at UBS SuMi TRUST Wealth Management estimate the acceleration could produce approximately 800 billion yen in additional annual revenue for the central bank.

Takaichi said the revenue from faster ETF sales could also help cover bond payments, freeing up government funds for public expenditure aimed at encouraging investment. Japan is separately considering establishing a dedicated economic security account to support longer-term strategic investments. The proposal comes as Takaichi seeks funding for a broad policy agenda that includes a two-year reduction in food consumption taxes, a 14-year investment program, and increased defense spending.