📈 Here's a riddle from the strange world of central banking. A bank announces it is selling off its enormous hoard of stocks. Four months later, the hoard is bigger than it has ever been.

That bank is the Bank of Japan. In January 2026 it finally began unwinding the ¥37 trillion (about $230 billion) in equity funds it had piled up over more than a decade. Yet by June, the market value of that pile had swelled past ¥110 trillion — more than 8% of the Tokyo Stock Exchange's main market. No other central bank on Earth ever built an equity position like this. And now the world is watching Japan try, very slowly, to climb back out.

How a central bank became Japan's biggest shareholder

To understand the oddity, rewind to 2010. The world was still bleeding from the 2008 Lehman crisis, the yen was punishingly strong, and Japanese stocks were sinking. Under then-Governor Masaaki Shirakawa, the BOJ did something no major central bank had done at scale: it started buying exchange-traded funds (ETFs) — baskets of stocks that trade like a single share — directly with central-bank money. The idea was to put a floor under the market and lift the gloom. The first annual budget for this was modest, a few hundred billion yen.

Then came 2013 and a far bolder governor, Haruhiko Kuroda. His "quantitative and qualitative easing" — quickly nicknamed ijigen kanwa, or "different-dimension easing" — turned a trickle into a flood. ETF buying expanded year after year. When COVID-19 hit in 2020, the BOJ set an annual purchase ceiling of ¥12 trillion. By the time it stopped buying in March 2024 — once inflation had finally climbed toward the bank's 2% target — it had become, in effect, the single largest holder of Japanese equities on the planet.

The numbers are blunt. At book value (what the bank originally paid), the stash sits around ¥37 trillion.

The sell-off began — and the pile grew anyway

In September 2025, the BOJ's board voted unanimously to start selling. The reaction was instant: the Nikkei average briefly dropped more than 800 points on the news. But the panic faded once people read the fine print.

The plan is almost comically cautious. The bank intends to sell roughly ¥330 billion (about $2 billion) of ETFs a year at book value, kept deliberately to around 0.05% of market turnover so it barely registers. At that pace, fully unwinding the position would take more than a century. Governor Kazuo Ueda has said as much in plain language: the sales will run for over a hundred years, and he won't be around to see them finished.

Selling duly began in late January 2026. The first month's disposal came to about ¥5.4 billion, a rounding error against the ¥37 trillion total.

Here is where it gets strange. According to reporting by the Nikkei, by June 2026 the market value of the BOJ's ETF holdings had not shrunk but climbed past ¥110 trillion (roughly $690 billion), up from around ¥90 trillion at the end of 2025. That is close to three times book value. The bank's footprint on the Tokyo Stock Exchange's top tier is now estimated above 8%, larger rather than smaller than before it started selling. Unrealized gains, around ¥48.5 trillion in January, are now estimated to top ¥70 trillion (about $440 billion).

The cause is almost poetic: a rally in artificial-intelligence and semiconductor stocks is lifting the whole market faster than the BOJ's trickle of selling can drain it — like bailing out a boat with a teaspoon while the tide keeps rising.

Why no other central bank did this

Here is the question international readers tend to ask first: didn't the Fed and the European Central Bank do something similar? Not really, and the difference matters.

During the 2020 COVID shock, the U.S. Federal Reserve did wade into ETFs, but it bought corporate bond funds, not stock funds, through an emergency facility. It treated them as a temporary backstop for credit markets and wound the position down within a year. The Fed has never bought equities; in fact, after a trading scandal, it tightened rules so far that its own senior officials are now barred from owning individual stocks. The ECB, likewise, has bought government and corporate bonds for years but has never touched shares.

The closest comparison is Switzerland. The Swiss National Bank holds a famously large equity portfolio, well over $150 billion, stuffed with U.S. tech names. But there is a crucial distinction: those are foreign stocks, accumulated as a byproduct of buying foreign currency to hold down the Swiss franc, managed passively like an index fund, with the SNB declining to vote its shares. Switzerland is parking reserves abroad. Japan was buying its own domestic market to support it.

That is what makes the BOJ genuinely one of a kind. It used purchases of its own country's stocks as a tool of monetary policy. No other major central bank has done that on anything like this scale.

Should a central bank own stocks at all?

This is where the experiment turns into an argument, and reasonable people land on opposite sides.

The case in favor is practical. Defenders argue the buying did its job: it steadied a fragile market in crises, signaled that the central bank had the market's back, and may have helped pry Japan loose from a decades-long deflationary mindset. And the eventual profits flow back to the state, ultimately to taxpayers.

The case against is structural. Critics warn that when a central bank buys a broad index, it props up strong and weak companies alike, dulling the market's job of sorting winners from losers. There is also a governance vacuum: the BOJ became a giant "silent shareholder," handing its voting rights to the fund managers who run the ETFs rather than holding companies to account. Owning equities also blurs the line between monetary policy and outright government ownership of business. And as Japan is now discovering, it is far easier to start than to stop.

The lesson the world is writing down

Strip away the Japan-specific detail and one lesson stands out, the kind that ends up in central-banking textbooks: unconventional policy is easy to enter and brutally hard to exit. The hundred-year timeline isn't a quirk; it is the warning. An emergency measure from 2010 has become a structural feature that no living official will live to fully unwind.

The stakes reach beyond Tokyo. The next time a global crisis hits and central banks weigh how deep to reach into risky assets, Japan's slow-motion exit will be Exhibit A. There is even a live tension playing out right now: with the yen hovering near 160 to the dollar and Japan spending tens of billions to defend it this spring, the BOJ is trying to normalize one corner of policy while firefighting another.

For now, the world's most extraordinary monetary experiment is stuck in a paradox: a central bank that is selling yet still growing, exiting yet more dominant than ever, and that will spend a century trying to step back.

Would your country ever let its central bank buy stocks — and if it did, how would you want it to get out?

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