Historic BOJ ETF Move Sparks Broad Market Decline and Crypto Pullback

BOJ’s ETF Unwind Triggers Market Sell-Off, Bitcoin Dips

Bitcoin fell back to just above $116,000 on Friday after briefly testing $118,000, as markets reacted to the Bank of Japan’s plan to unwind its $250 billion in ETFs and Japanese Real Estate Investment Trusts (JREITs).

The BOJ will sell ETFs with a book value of ¥330 billion ($2.2 billion) annually, equivalent to ¥620 billion ($4.2 billion) at market prices, part of holdings accumulated since 2010. Governor Kazuo Ueda said the sell-off would be gradual, taking more than a century to fully execute.

The central bank also held its benchmark rate at 0.5% in a 7-2 vote. Two members pushed for an immediate hike, raising expectations of potential tightening as early as October. Japan’s core CPI rose to 2.7% in August, above the 2% target.

The Nikkei dropped over 1%, while the 10-year JGB yield climbed to 1.64%. Bitcoin and other cryptocurrencies pulled back amid the broader risk-off sentiment.