According to the financial system report released by the Bank of Japan, Japan's financial system remains generally stable. Banks boast robust capital and financing bases, enabling them to weather shocks on par with a global financial crisis, as well as navigate multiple pressures, including geopolitical risks, a downturn in expectations for AI investments, and significant interest rate hikes. The report highlights the rapid growth of global AI investments, with hyperscale cloud service providers ramping up their data center investments and meeting funding requirements through corporate bond issuance, long-term leasing, and external financing. Non-bank financial intermediaries, such as private equity funds, are increasingly playing a pivotal role in financing. Should expectations for AI investment profitability diminish, institutions may adjust their investment portfolios, potentially amplifying market volatility and spilling over into Japan's financial markets. Furthermore, the advancement of cutting-edge AI technologies could escalate the risk of cyberattacks. The Bank of Japan has stated that it will encourage financial institutions to bolster their cybersecurity and system resilience through both on-site inspections and off-site monitoring.