The Bank of Japan has become more concerned about a scenario in which rising demand related to artificial intelligence accelerates inflation, explicitly identifying it as a risk factor after its July Monetary Policy Meeting. With oil prices declining, AI-related demand has been cited as a potential source of inflationary pressure.
The Bank of Japan has become more concerned about a scenario in which rising AI-related demand drives an acceleration in inflation, explicitly identifying it as a risk factor in materials released after its July Monetary Policy Meeting. The materials also noted the view that it could become a source of inflationary pressure after the surge in oil prices subsides.
According to people familiar with the BOJ, awareness of AI is changing within the Policy Board, with recognition growing that discussion of AI, which had previously attracted little attention, is now becoming more common. BOJ officials who attended the meeting of branch managers on 9 July were also reported to have pointed to the possibility of benefiting from AI demand.
As oil price trends continue to affect financial conditions, AI-related demand is being identified as a risk factor for future price developments.