The Bank of Japan warns that AI demand may increase inflation risks

According to Jinshi reports, the Bank of Japan stated on Monday that global demand related to artificial intelligence may create persistent upward pressure on inflation in Japan, indicating that the bank is increasingly concerned about inflation risks, which may further strengthen its rationale for recent interest rate hikes.

The Bank of Japan pointed out that in the short term, the investment boom driven by AI may lead to inflation effects that exceed the benefits brought by productivity improvements. The report stated that the spillover effects from AI demand will persist for some time, while the rising import costs due to the depreciation of the yen will also increase domestic inflationary pressures.