Economic Buzz: Bank of Japan minutes indicate concern on Middle East, AI demand

Bank of Japan minutes from its July 30 and 31 monetary policy meeting showed that board members deemed it necessary to closely monitor the impact of developments in the Middle East and AI-related demand.

The two factors drove the risk discussion at the meeting, with the yen's depreciation also taking its place in the talks. One board member noted that, for economic activity, the developments in the Middle East exerted downward pressure, the expansion in AI-related demand exerted upward pressure, and the depreciation of the yen worked in both directions; for prices, these factors all exerted upward pressure.

The BoJ also noted that should domestic and external demand for AI-related materials and parts increase more than expected, there was a risk that upward pressure on prices, including consumer prices, would further heighten.

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