Tokyo core CPI rises 1.8% in August, supports rate hike expectations

Tokyo's core consumer price index rose 1.8 percent in August from a year earlier, data released Friday showed, marking a slight acceleration that reinforces expectations the Bank of Japan will continue raising interest rates. The increase, which matched market forecasts, followed a 1.7 percent rise in July and kept inflation running just below the central bank's 2 percent target. The Tokyo CPI, which excludes volatile fresh food prices, is closely watched as a leading indicator for nationwide inflation trends. A narrower measure that strips out both fresh food and energy costs, which the Bank of Japan monitors for signs of persistent underlying inflation, increased 1.9 percent in August.