Japan Core Inflation Hits 1.8% Amid Ongoing Conflict and Weakening Yen

Japan's core inflation rate accelerated to 1.8% in July from 1.6% in June, according to official data released on Friday. This increase is largely attributed to the ongoing Middle East war and a weak yen, which has pushed up prices.

The internal affairs ministry's reading, which excludes volatile food prices, met market expectations. Excluding energy prices as well, inflation was 1.9%, higher than June's 1.7%. Unadjusted, inflation increased to 1.9% from 1.6% in June, also meeting consensus forecasts.

The weak yen has both positive and negative effects on Japan. While it benefits big exporters like Toyota and Sony by increasing their foreign earnings when converted back into yen, it increases the cost of imports such as oil and food for resource-poor Japan.