The Bank of Japan announced on October 30 that it would maintain the unsecured overnight lending rate at around 1.25%, with the decision passing by a vote of 8 in favor and 1 against.

Commissioner Takada Tsukasa believes that the potential CPI inflation has already achieved the price stability target, and advocates raising interest rates to around 1.5%, but the proposal was rejected.

At the same time, the Bank of Japan has decided to accelerate the sale of its holdings of ETF. The annual sales volume will be increased from approximately 330 billion yen to about 860 billion yen, which is equivalent to about 0.1% of the market trading volume. The new arrangement will take effect from January 2027. Converted to market value, the annual sales amount is approximately 2.46 trillion yen. The Bank of Japan stated that it will continue to proceed with the sales smoothly and may adjust or suspend them temporarily depending on the financial market conditions.

1. Monetary Market Operations Policy (adopted by a majority vote of 8 in favor and 1 against)

At today's monetary policy meeting ( MPM ), the Policy Board of the Bank of Japan decided to set the guidelines for money market operations as follows until the next meeting is held:

The Bank of Japan will ensure that the unsecured overnight interbank lending rate remains around 1.25%.

2. Adjustment of the selling speed for exchange-traded funds ( ETF ) (unanimously approved)

At the monetary policy meeting held in September 2025, the Bank of Japan, drawing on its experience of smoothly selling "stocks purchased from financial institutions" as of July 2025, decided to temporarily sell a portion of its holdings of ETF (the amount sold at that time accounted for approximately 0.05% of the market trading volume) on a scale roughly equivalent to that of the "stocks purchased from financial institutions." The selling rate was set at about 330 billion yen per year (calculated at book value).

The Bank of Japan began selling ETF in January 2026 and has been steadily advancing these sales while avoiding any significant impact on the market. Meanwhile, the trading volume in the stock market has been continuously expanding. In light of these circumstances, at today's monetary policy meeting, the Bank of Japan decided to sell a portion of its holdings of ETF equivalent to about 0.1% of the market trading volume, setting the sales rate at approximately 860 billion yen per year (calculated at book value).

The selling speed is calculated based on the trading volume of the Prime market on the Tokyo Stock Exchange from January to September 2026, as well as the price-earnings ratio of the ETF sold by the Bank of Japan during the same period. If the annual selling amount is converted into market value using the same ratio, it would be approximately 2.46 trillion yen.

This adjustment will be implemented in January 2027.

To adapt to changes in the financial market conditions, it is possible to temporarily adjust the sale amount or suspend sales within the annual sales speed range. (This point remains unchanged from before.)

The sales speed of Japanese real estate investment trusts ( J-REIT ) will continue to be maintained at approximately 5 billion yen per year (calculated based on book value).

Committee members who voted in favor of this action include: Haruo Ueda, Governor of the Bank of Japan; Ryosuke Kamimura, Vice Governor of the Bank of Japan; Masahiko Uchida, Vice Governor of the Bank of Japan; Naoki Tamura, Member of the Policy Board of the Bank of Japan; Sota Takada, Member of the Policy Board of the Bank of Japan; Ichiro Masukawa, Member of the Policy Board of the Bank of Japan; Eiichiro Asada, Member of the Policy Board of the Bank of Japan; and Ayano Sato, Member of the Policy Board of the Bank of Japan.

The member who voted against this action was Takada Tsukasa, a member of the Policy Board of the Bank of Japan. Takada Tsukasa believes that as the potential consumer price index ( CPI ) inflation has reached the price stability target, the current situation has entered a new phase, and the Bank of Japan needs to accelerate the pace of bringing policy rates closer to neutral rates in order to be able to respond flexibly. He proposed that the Bank of Japan should set its money market operation guidelines as follows: to maintain the unsecured overnight interbank lending rate at around 1.5%. This proposal was rejected by a majority vote.