Tokyo, Nov. 6 (Jiji Press)–Japanese Prime Minister Sanae Takaichi said Friday that proceeds from the Bank of Japan’s stepped-up sales of its exchange-traded fund holdings will be used to cover spending under a special investment quota that forms a key part of her government’s growth strategy. At a meeting of the Financial Affairs Committee of the House of Representatives, the lower chamber of the Diet, Japan’s parliament, Takaichi said the money would be allocated to a new special government account for projects in areas deemed particularly important for economic security, under the special quota aimed at making Japan strong and prosperous. The BOJ’s payments to the national treasury are expected to increase as the central bank accelerates its unloading of ETFs. “Additional proceeds (from ETF sales) are the fruits of Japan’s growth,” the prime minister said. “It’s appropriate to reinvest them in crisis management and growth investments to achieve further growth.” She said the government has no plans to use the proceeds to cover an increase in resident tax deductions, a measure advocated by the opposition Democratic Party for the People. The Takaichi administration aims for more than 370 trillion yen in public- and private-sector investments by fiscal 2040. The government plans to establish the special investment quota under its fiscal 2027 budget to support growth-enhancing and crisis management measures. Government agencies and ministries submitted requests totaling 12,173 billion yen under the quota by the end of August. At its monetary policy meeting late last month, the BOJ decided to increase sales of ETFs it purchased during its previous large-scale monetary easing to 860 billion yen a year on a book value basis from the current 330 billion yen, starting in January 2027. Based on sales since January this year, the annual sale amount is estimated to reach around 2.46 trillion yen at market value. The difference between the market and book values will be recorded as profit. As of the end of March, the BOJ held ETFs worth about 37 trillion yen at book value and 94 trillion yen at market value. The BOJ contributes its net surplus after deductions for statutory reserves and dividend payments to the national treasury. The funds are recorded as nontax revenue in the general account of the government budget. In fiscal 2025, the BOJ paid 1.83 trillion yen to the government. END [Copyright The Jiji Press, Ltd.]
