Quick Comment: Equity Market Volatility, Our BoJ Outlook, and Faster ETF Sales

If equity volatility proves short-lived, it should not affect the BoJ's December rate hike, but a persistent market correction could tighten financial conditions and push the hike back to January, as the BoJ would need time to assess the impact on capex and parts of private consumption. The October Outlook Report noted that department store sales have been solid since fall 2025 on strong spending by wealthy households amid high stock prices, and cited higher stock prices, energy-cost relief measures and a tight labor market as supports for consumption resilience; the BoJ's hiking stance is unlikely to change unless global downside risks grow. Media reported that the Prime Minister said on November 6 that gains from the BoJ's ETF sales would fund a new economic security special account; if correct, higher non-tax revenue transfers would offset extra bridge bond issuance without widening the fiscal deficit. Of roughly JPY1.9trn net income in FY2025, about JPY1.8trn was transferred to the