Key facts
- Japan's core consumer price index (CPI) rose 1.8% year-on-year in July.
- The figure matched economists' median forecast.
- Inflation excluding fresh food and energy rose 1.9% year-on-year.
- The Bank of Japan is expected to raise interest rates at its September policy meeting.
Japan's core consumer inflation accelerated in July, rising 1.8% year-on-year and matching economists' median forecast. This figure, which excludes volatile fresh food prices but includes energy-related items, remained below the Bank of Japan's 2% target for the seventh consecutive month, partly due to government subsidies on fuel costs. An index stripping out both fresh food and fuel, closely monitored by the BOJ as a gauge of underlying inflation, increased by 1.9% year-on-year in July, up from 1.7% in June. Analysts anticipate core inflation will surpass the BOJ's target in the coming months as rising raw material costs broaden. The Bank of Japan, which raised its policy rate to 1% in June, is widely expected to increase it further to 1.25% at its September 17-18 policy meeting.