Bank of Japan to keep rate hikes despite AI worries

The Bank of Japan's expected steady pace of rate increases, roughly one every three months, comes as concerns grow over whether AI and data center investment might slow. Those concerns intensified after the Democratic Party's midterm election victory earlier this month, with many candidates pledging stricter regulations for data center projects. Even so, the view from Soichiro Tateishi of the Japan Research Institute is that AI is only one factor contributing to inflation in Japan, and its impact on the pace of rate hikes will not be significant. That suggests the central bank's tightening path may remain intact despite the uncertainty surrounding AI-related spending.