Bank of Japan Deputy Governor Shinichi Uchida stated on October 5, 2026, that the central bank is closely monitoring the economic impact of artificial intelligence. Speaking at the ECONDAT 2026 Fall Meeting in Tokyo, he characterized AI as a general-purpose technology capable of driving productivity gains and structural shifts in financial conditions, labor markets, and supply chains.
Uchida noted that AI currently acts as a positive demand shock, supporting economic activity and contributing to rising equity prices. However, he warned of potential risks, specifically highlighting that increased issuance of AI-related corporate bonds is exerting upward pressure on long-term interest rates. He also cautioned that stagnant corporate profits could offset the current demand benefits.
The central bank is evaluating how AI influences the neutral interest rate and the natural unemployment rate. Uchida emphasized that these assessments are complex and require a balanced approach. The Bank of Japan now regularly discusses AI implications during policy meetings, considering them alongside other uncertainties such as climate change and geopolitical developments.
Practical measures are also underway, with the Bank of Japan and the Financial Services Agency introducing new guidelines to address risks like cybersecurity. While surveys show that the adoption of generative AI among Japanese financial institutions is growing, the technology remains in a developing stage.
