BOJ May Hike Rates as Japan's Core Inflation Holds Steady

Japan's core consumer inflation is expected to have remained steady at 1.8% in August, according to a Reuters poll of 16 economists. This figure matches July's rate and stays below the Bank of Japan's (BOJ) 2% target.

The BOJ may consider hiking interest rates to 1.25% at its upcoming meeting, amid concerns over rising price pressures and a weak yen. Oil prices have risen sharply, with both major benchmarks on track to end the week above $100 per barrel for the first time since mid-May.

However, government subsidies are helping to offset the impact of higher oil prices on consumer costs. 'Higher crude oil and naphtha prices are increasingly being passed on to consumer prices, especially for daily necessities,' said Ryohei Ikeda, an analyst at Mizuho Research Institute.