BOJ stress test says Japan banks can weather AI crash and global rate spike

The Bank of Japan’s latest stress test finds Japan’s banks can withstand an AI sector crash and a spike in global interest rates, according to Nikkei Asia today. The assessment calms immediate fears that an AI-driven selloff could collide with rising borrowing costs to destabilize the system. It lands as markets scrutinize BOJ policy normalization risks and volatile overseas yields.

The scenarios model a sharp correction in AI-linked assets and a jump in foreign bond yields, with systemwide buffers seen absorbing losses without threatening stability, Nikkei Asia reports. The outlet says the findings indicate preparedness across the sector, while cautioning that risks remain if shocks persist. Watch for the BOJ’s formal release, any guidance on capital and liquidity, and how bank shares respond in Tokyo. [Developing. This article will be updated.]