Japan's Financial Services Agency is stepping up scrutiny of financing for AI data centers as major banks and life insurers increase exposure to the fast-growing sector. According to Sina Finance, a senior FSA official said regulators will focus on key areas such as lenders' risk management frameworks, with current attention centered on data center projects in the United States.

The FSA has also listed project financing, including data centers, and loans to Japan's domestic real estate sector as priority areas for closer monitoring in policy priorities released earlier this month. The official said the agency does not intend to block financing for AI data centers, which it views as a growth industry, but added that regulators still need to watch the risks more closely.