Bank of Japan Deputy Governor Shinichi Uchida warns AI boom may ease financial conditions but risks market correction

On Monday, October 5, 2026, Bank of Japan Deputy Governor Shinichi Uchida said in Tokyo that the global AI boom has eased financial conditions by boosting demand and asset prices, but warned of a market pullback if expected profits fail to materialize. He noted that AI could raise productivity and affect the natural rate of interest, though its overall impact on Japan's rate is still unclear. The BOJ has identified AI-related demand as a factor that could push inflation above its 2% target, potentially requiring further monetary tightening. The central bank raised rates in June and September due to energy shocks from the Iran war and a weak yen.