For over a decade, the Bank of Japan (BoJ) has pursued a policy of unprecedented monetary stimulus, a cornerstone of which has been the massive purchase of exchange-traded funds (ETFs).
This bold strategy was a first for a major central bank and was aimed at pulling Japan out of a prolonged period of deflation and economic stagnation.
By injecting money into the market and propping up stock prices, the BoJ hoped to revitalize the nation’s economy.
The result is a staggering portfolio of ETFs, now valued at an estimated ¥76 trillion (about $485 billion USD) against a book value of ¥37 trillion. This enormous unrealized gain, or “paper profit,” has led many in Japan to wonder, “Shouldn’t this profit be returned to the public?”
The prospect of a distribution has generated significant public interest, but there are several major obstacles to making it a reality.
