Economist: BOJ's accelerated pace of ETF sales may provide funding support for Sanae Takaichi's spending plans

The Bank of Japan announced on Friday that, starting in January next year, it will raise the annual pace of ETF sales from the current 330 billion yen to 860 billion yen on a book-value basis. With the accelerated pace, the time needed to complete the full disposal is expected to shrink from 112 years to about 43 years. By law, after deducting dividends and other expenses, the Bank of Japan must remit its surplus income to the government. Gains from selling ETFs can increase the amount remitted, providing the government with additional non-tax revenue. Senior economist Taro Kimura estimates that with the faster sales pace, the Bank of Japan could generate about 80 billion yen in additional revenue each year. This potential extra income could help Sanae Takaichi raise funds for her policies when compiling next fiscal year's budget. Her policy pledges include a two-year cut in the food consumption tax, a 14-year growth investment plan, and increased defense spending. The Bank of Japan's additional remittances could also help fund a special economic security account the government plans to establish. Kazumasa Ishii, a strategist at UBS SuMi Trust Wealth Management and a former Cabinet Office official, said: "Rather than filling large temporary revenue gaps caused by policies such as the consumption tax cut, the Bank of Japan's remittances are better suited to supporting multi-year projects, such as the economic security special account."