Reuters reported that the Bank of Japan warned on 23 October, in its semi-annual report on Japan’s banking system, that AI-related market shocks and cyberattacks could affect Japanese banks. The central bank saw no major financial imbalances, but said rising property and stock prices warranted attention while interest rates remained low.
The bank said Japanese lenders had steadily increased lending to foreign non-bank financial institutions, including private credit providers and private equity funds, that finance hyperscalers. If expectations for returns on AI investment fell, those institutions could adjust their portfolios in ways that amplify a shock and carry its effects to Japan. A global market correction could also hit Japanese shares whose prices have risen on expectations of strong profits in AI-related sectors.
The Bank of Japan also urged financial institutions to prepare for threats including the misuse of generative AI. It described cyber incidents as a risk to individual institutions and their customers that could spread to other financial institutions.
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