Ten years of support, one day of letting go. The Bank of Japan officially changed its long-standing absolute protection of the Japanese stock market.

At the September monetary policy meeting this year, the central bank made a landmark decision—beginning to reduce ETF holdings. Although the annual sale amount is only 330 billion yen, the move appears slow, but the signal is clear enough: the former largest buyer is now gradually withdrawing.

The voting data at the meeting is even more interesting. Two members advocated raising the interest rate to 0.75%, which sparked significant disagreement within the central bank. The emergence of hawkish voices indicates that the Bank of Japan is seriously pushing for policy normalization. In other words, the days of relying on the central bank to support the market are gone.

Numbers speak for themselves. As of the end of March 2025, the Bank of Japan holds ETF assets worth 37 trillion yen on its books, with a market value of approximately 70 trillion yen. This astronomical holding stems from the ultra-loose monetary policy launched in 2010. Over the past decade, the central bank has been like a stabilizing force for the Japanese stock market—when the market declines, funds appear.

As a result, investors have developed a habit—waiting for the central bank to buy, then cashing out. Institutions have even formed a routine—pre-positioning and waiting for the central bank to take over. This phenomenon, known as "central bank put options," has made market participants increasingly dependent on this invisible hand of the central bank.

Now, the situation has reversed. From the largest buyer to a potential seller, the Bank of Japan is truly changing the game. What does this mean? Companies and investors will need to bear more risks themselves. And this shift is reshaping the foundation of the yen's value.