Bank of Japan’s Uchida warns AI’s economic boost comes with risks

Bank of Japan Deputy Governor Shinichi Uchida has a message about artificial intelligence: it is helping the economy right now, and that is exactly why the central bank is watching it so closely. Speaking on October 5, 2026, at the ECONDAT 2026 Fall Meeting in Tokyo, Uchida said the BoJ will track a wide range of economic indicators to understand what AI is actually doing to Japan’s economy. A demand shock, with fine print Uchida described AI as a general-purpose technology that could deliver substantial productivity gains and trigger structural changes across labor markets, demand, supply and overall financial conditions. For now, Uchida framed AI’s impact in fairly upbeat terms. He called it a positive demand shock that has supported economic activity. “Big positive demand shock” He also pointed to the stock market. Rising equity prices tied to AI have helped ease financial conditions on balance, according to Uchida. Then came the catch. Uchida highlighted a rise in AI-related corporate bond issuance, which he said has put upward pressure on long-term interest rates. Uchida went a step further. He warned that the current demand benefits from AI could be offset if corporate profit...