One of the distinctive features of corporate governance reform in Japan was the requirement for listed companies to disclose their policy to reduce cross-shareholdings. The purpose of this paper is to highlight how corporate governance reforms have affected the ownership structure of Japanese firms. We built a comprehensive database of cross-shareholdings from 2010 to 2019 and analyzed the determinants of the sales of cross-shareholdings and their impact on corporate behavior and performance. The results show a discontinuous increase in sales of cross-shareholdings after 2015 when the Corporate Governance Code came into effect. One reason for this increase is that the Corporate Governance Code requires the listed firms to have two or more independent outside directors. The increase in the number of outside directors has a statistically positive effect on the probability of selling cross-shareholdings. Different from the perspective of the Abe cabinet, raising money from the sales of cross-shareholdings was not used for capital expenditures and R&D investments. Rather, to date, it has been mainly used to buy back the company’s own shares. There is also no clear evidence that firm performance improved after the sales of cross-shareholdings.