BOJ Faces Pressure to Raise Rates Amid Accelerating Inflation

Japan's core consumer inflation has accelerated in July from a year earlier, driven by rising import costs and the impact of the Middle East conflict on crude oil prices. The Bank of Japan will scrutinize this data at its next policy meeting on September 17 and 18.

The core consumer price index rose 1.8% in July from the same month a year earlier, matching a median forecast. This followed a 1.6% rise in June and remains below the BOJ's 2% target for a seventh successive month.

Analysts expect core inflation to accelerate beyond the BOJ's target in the coming months as raw material costs continue to be passed on by firms. Taro Saito, an economist at NLI Research Institute, predicts that price hikes for food and daily necessities will intensify later this year.