Core inflation in Japan’s capital rises 2.4% yr/yr in Aug

TOKYO : Core consumer prices in Japan’s capital rose 2.4 per cent in August from a year earlier, data showed on Friday, accelerating for the fourth straight month and keeping alive market expectations of further interest rate hikes in coming months.
The stubbornly high inflation could back the case for the central bank to continue its monetary policy tightening campaign.
The increase in the core consumer price index (CPI), which excludes volatile fresh food costs, was faster than a median market forecast of 2.2 per cent and the 2.2 per cent gain in July.
A separate index that strips away the effects of both fresh food and fuel costs, closely watched by the BOJ as a broader price trend indicator, rose 1.6 per cent in August from a year earlier after a 1.5 per cent rise in June.
The Tokyo inflation figures are considered a leading indicator of nationwide trends.
The BOJ ended negative interest rates in March and raised its short-term policy rate to 0.25 per cent in July in landmark steps away from a decade-long radical stimulus programme.
BOJ Governor Kazuo Ueda said the central bank would raise rates further if inflation remains on track to durably hit its 2 per cent target in coming years, as the BOJ board projects.
The central bank expects rising wages to push up service prices and keep inflation durably around 2 per cent.