Bank of Japan Assets Fall to Lowest Since 2020 as Unwind Continues
The Bank of Japan's total assets fell $98 billion in Q3 2026 to $3.95 trillion, the lowest since early 2020, as its balance sheet unwinding continues.
Japan's central bank continued to shrink its footprint in the third quarter. Total assets declined by $98 billion to $3.95 trillion, the lowest level since Q1 2020. Since peaking in Q1 2024, the balance sheet has contracted by $828 billion, or 17.4%, and the asset-to-GDP ratio has dropped 28 percentage points to 94%, the lowest since 2018.
Government bond holdings fell $90 billion during the quarter to $3.19 trillion, the lowest since Q1 2020. JGB holdings are now down $556 billion, or 14.9%, from their 2023 peak.
The BoJ also sold $568 million of equity ETFs and J-REITs last quarter, bringing those holdings to $233 billion, the lowest since Q3 2021.
Source: The Kobeissi Letter