Japan Core Inflation Hits 7-Month High as BOJ Rate Hike Bets Intensify

Japan's core consumer inflation accelerated to 1.8% in July, driven by higher import costs due to a weak yen and rising oil prices.

The data, released on Friday, matched economists' forecasts and follows a 1.6% gain in June. It marked the seventh consecutive month that inflation has stayed below the Bank of Japan's (BOJ) 2% target, largely due to government subsidies holding down fuel costs.

Masato Koike, senior economist at Sompo Institute Plus, expects core consumer inflation to re-accelerate in coming months as crude oil prices rise and the weak yen adds pressure on raw material costs. He predicts that the BOJ will raise interest rates to 1.25% from the current 1% at its September policy meeting.