Japanese shares fell on Friday after the BOJ kept short-term rates at 0.5% but revealed two dissenting votes for a hike and moved to sell its ETF and REIT holdings.

The Nikkei 225 fell 0.58%, or 264.26 points, to end at 45,039.17.

The BOJ will sell about 330 billion yen in ETFs and 5 billion yen in J-REITs annually, around 0.05% of market turnover, and scrap its ETF lending facility.

It said Japan's economy is recovering moderately, though exports and output are flat, housing investment is weak, and U.S. tariffs are squeezing manufacturers. Core CPI stands at 2.5-3.0% on higher food prices, with inflation expectations firming.

Growth is expected to slow on trade tensions before recovering, while inflation edges toward the 2% goal. Dissenters Hajime Takata and Naoki Tamura pushed for a 0.75% rate, citing upside price risks.

In other economic news, Japanese investors boosted overseas bond holdings by 1.48 trillion yen in the week to Sept. 13, finance ministry data showed Friday, as 10.78 trillion yen in purchases outweighed 9.3 trillion yen in sales.

On the corporate front, Japan Real Estate Investment (TYO:8952) is considering a multibillion-yen equity sale to fund office acquisitions, Bloomberg reported, as Tokyo REITs rally on rising rents.

GNI Group (TYO:2160) said its unit Cullgen finished enrollment in an Australian Phase 1 trial for CG001419, a first-in-class oral pain drug targeting safer, non-opioid treatment.

Sumitomo Mitsui Banking Corp., part of SMFG (TYO:8316), completed a 20% stake buy in India's YES BANK (BOM:532648) and plans to lift its holding to 24.2% with a further 51 billion yen purchase. It also exited its 1.65% stake in Kotak Mahindra Bank.

Source: MT Newswires