BOJ Inflation Gauge Hits New High Amid Rate Hike Speculation

The Bank of Japan's gauge of underlying inflation accelerated to its highest level in recent months, supporting the case for another rate hike. Consumer prices excluding fresh food and special factors climbed 2.6% in August from a year earlier.

This marks an acceleration from 2.3% in July, according to a report released by the BOJ on Friday. The gauge of underlying inflation is well above the target, with authorities warning of the risk of inflation overshooting.

A separate indicator that excludes non-fresh food, energy, and special factors also picked up to 1.8% from 1.6%. These figures suggest continued upward pressure on prices, bolstering the argument for further rate hikes.