A member of the Bank of Japan's policy board said the central bank is obliged to limit the amount of funds invested in exchange-traded assets, even though it contributes to monetary easing.
Board member Hitoshi Suzuki said that although there is a need to buy ETFs to achieve the inflation target of 2%, this will have a large and not the best impact on the bank's balance sheet.
The Bank of Japan removed its ETF buying target from its annual program of £ 6 trillion ($ 55 billion), but retained an overall ceiling of £ 12 trillion.
All this pushed yen down against other currencies, such as dollar and the Swiss franc.
The abolition of the buying target was decided back in March in order to stop the criticism spread against the central bank. Many claimed that it distorted market mechanisms, especially since the Bank of Japan became the top holder of Japanese stocks because of it.
Suzuki suggested that the Bank of Japan should buy ETFs only during times of heightened market volatility, not at stable times.
It is also unusual for a central bank to buy risky assets such as ETFs, which is why many are concerned about the BOJ's bloated balance sheet. Since April, the Bank of Japan has exclusively bought ETFs linked to Topix
Many analysts believe that the removal of the £6 trillion target reduced the volume of bond purchases, but Governor Haruhiko Kuroda said the Bank of Japan does not intend to do such.
And during its March monetary policy meeting, the Bank of Japan decided to allow 10-year government bonds to rise in order to keep both short-term and long-term interest rates low.