Bank of Japan Deputy Governor Shinichi Uchida said October 5 that the global artificial-intelligence boom is changing economic demand and financial conditions, while warning that markets could correct if expected profits fail to materialize.
In opening remarks at the Bank of Japan’s ECONDAT 2026 Fall Meeting, Uchida described worldwide AI adoption as a major positive demand shock. Investment in computing capacity, data centers and infrastructure can lift activity and prices before long-term productivity gains are realized.
AI can loosen and tighten conditions
Uchida said rising AI-related share prices can ease financial conditions by increasing wealth and lowering the effective cost of equity financing. At the same time, heavy bond issuance by technology companies funding capital programs can push long-term yields higher and make borrowing more expensive elsewhere.
That two-way effect matters because monetary policy depends not only on an overnight policy rate but also on how asset prices, bond yields, credit and expectations move through the economy.
Productivity gains remain uncertain
AI could eventually raise productivity and encourage capital accumulation, potentially affecting the natural rate of interest. The timing and size of those gains remain uncertain. Uchida warned that asset prices could reverse if anticipated AI earnings do not arrive.
The remarks do not announce a new Bank of Japan rate decision. They frame AI as a structural force policymakers must examine alongside inflation, productivity, investment and financial stability.
The speech follows strong technology-market attention across Asia. AskNovus separately reported that Indian IT shares rose after Accenture’s outlook and that energy prices remain an important financial input.
Sources
- Bank of Japan — Uchida opening remarks, October 5, 2026
- Reuters — report on the speech, October 5, 2026
- The Japan Times — policy context, October 5, 2026
Illustrative image credit: Clement Souchet/Unsplash.