TOKYO (Reuters) – Core consumer prices in Japan’s capital rose 2.4% 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% and the 2.2% 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% in August from a year earlier after a 1.5% 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% 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% 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%.
(Reporting by Makiko Yamazaki; Editing by Sam Holmes)
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