Bank of Japan warns AI boom could make markets vulnerable to valuation risks

Summary

• Speaking about the central bank’s policy outlook, Uchida said robust corporate spending and the adoption of new technologies were boosting economic activity and putting upward pressure on prices.
• “It is a big positive demand shock, which has put upward pressure on the economy and prices,” Uchida said in the text of a speech published on the central bank’s website on Monday.
• More accommodative financial conditions have been supported by rising stock prices and increased capital accumulation, while heavy corporate bond issuance has put upward pressure on long-term interest rates, Uchida said.

AI Generated Summary

The global artificial intelligence (AI) boom has acted as a large-scale positive demand shock, easing financial conditions and lifting asset prices, Bank of Japan (BOJ) Deputy Governor Shinichi Uchida said.