BOJ Deputy Governor Uchida Warns AI Demand Shock Lifts Prices Ahead of Productivity Gains

Bank of Japan Deputy Governor Shinichi Uchida stated that artificial intelligence is functioning as a significant positive demand shock that is pushing up economic activity and prices before productivity improvements materialize. Speaking at the ECONDAT 2026 Fall Meeting, Uchida noted that AI-driven equity gains have eased financial conditions overall, despite heavy bond issuance by AI firms raising long-term bond yields. Uchida warned that financial markets face correction risks if corporate profitability fails to justify heavy capital expenditure. Analysts view the remarks as leaning hawkish, supporting further BOJ rate hike expectations.