A column has been published arguing that the Bank of Japan is not operated by AI. Amid debate over the relationship between AI and central banks, the author presents views on the premise that the Bank of Japan can maintain its 2% inflation target and on the future level of policy rates.
The article presents the view that using AI to conduct monetary policy is not realistic and that human judgment and discretion remain necessary. The premise that AI could fully forecast and control markets involves uncertainty, with hacking risks and unpredictability also cited.
The Bank of Japan currently states that the economy has become strong enough to sustain its 2% inflation target, and the article says monetary policy decisions should combine scientific knowledge with human discretion.
The author presents the level of neutral monetary policy as potential GDP plus the target inflation rate, suggesting that Japan should aim for 3%. At the same time, the author recognizes that in practice Governor Ueda (植田) will exercise creative discretion in deciding when and at what pace to move policy rates.
The article records the author's personal view that the Bank of Japan's policy rate will be around 2.5% this time next year, suggesting a gap between an AI-operated policy scenario and actual policy management.