BOJ Warns AI Demand Could Fuel Persistent Inflation

The Bank of Japan (BOJ) has expressed concern over the potential inflationary effects of growing global demand for artificial intelligence (AI). In its quarterly outlook report, the BOJ noted that AI-related investment is boosting prices in the short term, outweighing productivity gains.

The report cited a 'positive global demand shock' for AI-related goods as one reason for rising producer prices. It also mentioned the ongoing Middle East conflict and subsequent oil price rise as contributing factors.

The BOJ estimated that AI-related demand could exert a lasting upward influence on consumer inflation, excluding fresh food and fuel. This could be exacerbated by lingering import costs from yen declines.