Japan's Core Inflation Accelerates Amid Geopolitical Tensions

Japan's core consumer inflation accelerated in July to 1.8 percent from a year earlier, driven by rising import costs due to a weak yen and geopolitical tensions.

The data, released on Friday, shows that the country's core consumer price index (CPI), which excludes volatile fresh food prices, rose at its fastest pace since March, when it was 2.1 percent.

This follows a 1.6 percent rise in June and remains below the Bank of Japan's (BOJ) 2 percent target for a seventh consecutive month, primarily due to government subsidies aimed at curbing fuel costs.

Analysts expect core inflation to accelerate above the BOJ's target in the coming months as raw material costs continue to be passed on to consumers.

According to Masato Koike, senior economist at Sompo Institute Plus, 'core consumer inflation is likely to re-accelerate given renewed tension in the Middle East, which will push up crude oil prices and add to price pressures from a weak yen.'