BOJ Deputy Governor Warns of Inflation Risks Amid AI Demand and Yen Depreciation
Bank of Japan Deputy Governor Ryozo Himino delivered a hawkish speech on August 27, stating that the central bank should continue to raise its policy interest rate and adjust monetary easing based on economic activity and price trends.
Himino emphasized the importance of keeping underlying inflation stable near the 2% target, as deviations from this target could negatively affect the economy.
He pointed out that two factors are driving inflation: the robust expansion of global demand related to artificial intelligence (AI), which has boosted economic activity and prices; and the upward pressure on import costs due to yen depreciation.
Himino believes that these factors are reinforcing each other, enhancing the persistence and breadth of upward inflationary pressures.