Key facts
- Tokyo's core consumer price index rose 1.6% year-on-year in June.
- The core CPI accelerated from 1.3% in May.
- An index excluding fresh food and fuel costs increased by 1.9% in June.
- The Bank of Japan will consider the data at its upcoming policy meeting.
Annual core inflation in Japan's capital accelerated in June, data showed on Friday, a sign of broadening price pressures. The Tokyo core consumer price index (CPI), which excludes volatile fresh food costs, rose 1.6% in June from a year earlier, accelerating from a gain of 1.3% in May and matching the median market forecast. An index stripping away the effect of fresh food and fuel, closely watched by the Bank of Japan as a better gauge of trend inflation, rose 1.9% in June after a gain of 1.6% in May. The Middle East conflict has complicated the BOJ's decision on the timing and pace of rate hikes, as higher energy costs fuel inflation while simultaneously squeezing an economy heavily dependent on oil imports. The BOJ raised interest rates to a 31-year high this month in a landmark step in its policy normalization, signalling readiness to tighten further as it focuses on taming price pressures from the energy shock induced by the Iran war.