Bank of Japan Governor Outlines Inflation Risks and AI Impact

Bank of Japan Governor Kazuo Ueda stated that underlying inflation is expected to remain around the 2% target, though rising energy prices present some upside risks. Speaking at an International Monetary Fund seminar, Ueda noted that while current wage growth is consistent with the inflation target, the goal has not yet become a social norm in Japan.

Ueda indicated the Bank of Japan may redeploy unconventional monetary policy tools if severe economic shocks occur, provided the bank can minimize negative market effects. He emphasized that the central bank is closely monitoring other global central banks because of their influence on interest rates and foreign exchange.

Regarding technology, Ueda suggested that AI could benefit Japan by addressing chronic labor shortages, though he warned of cyber risks facing small firms and banks. International Monetary Fund Managing Director Kristalina Georgieva added that AI-driven growth volatility could complicate global efforts to fight inflation.