The Bank of Japan (BOJ) concluded its two-day policy meeting on September 19, 2024, by maintaining its short-term interest rate at 0.5%, a decision widely anticipated by market analysts. However, the central bank unveiled a significant policy shift by announcing plans to begin selling its holdings of exchange-traded funds (ETFs) and real estate investment trusts (REITs). This move signals a step toward policy normalization, despite the majority vote to keep rates unchanged. Notably, board members Naoki Tamura and Hajime Takata dissented, advocating for a more hawkish stance. Hirofumi Suzuki, Chief Currency Strategist at SMBC in Tokyo, remarked that the decision carried a hawkish undertone, particularly given the dissent and the timing of the Federal Reserve’s recent rate cut. Charu Chanana, Chief Investment Strategist at Saxo in Singapore, highlighted the growing internal pressure for quicker normalization, which could bolster the yen. Ben Bennett, Head of Investment Strategy for Asia at L&G Asset Management in Hong Kong, noted that the BOJ’s announcement, coupled with the Fed’s rate cut, could lead to yen appreciation. The BOJ’s decision reflects a cautious yet deliberate approach to unwinding its expansive monetary policy, with potential implications for Japan’s equity markets and banking sector.