BOJ's Uchida warns the AI boom could trigger a market correction. A central bank—not a sell-side permabear—naming bubble risk in the AI trade matters. If policy voices keep leaning this way, crowded m

What happened: BOJ's Uchida said in a speech published on the Bank of Japan's website that the rapid adoption of AI acted as a major positive demand shock, and warned a mismatch between elevated asset valuations and AI-generated profits could raise the risk of a market pullback. Key numbers: BOJ Why it matters: Uchida said AI-driven stock gains have eased financial conditions while heavy bond issuance by AI-related companies has pushed up long-term interest rates. The BOJ sees strong AI demand as a factor that could push inflation above its 2% target, possibly requiring further tightening.

BOJ's Uchida said in a speech published on the Bank of Japan's website that the rapid adoption of AI acted as a major positive demand shock, and warned a mismatch between elevated asset valuations and AI-generated profits could raise the risk of a market pullback.

Uchida said AI-driven stock gains have eased financial conditions while heavy bond issuance by AI-related companies has pushed up long-term interest rates. The BOJ sees strong AI demand as a factor that could push inflation above its 2% target, possibly requiring further tightening.