Japan's Core Inflation Accelerates, Bolstering Case for Rate Hike

Japan's core consumer inflation accelerated in July from a year earlier, rising 1.8% year/year, matching forecast expectations.

The data, released on Friday, showed that companies are passing on rising import costs due to the weak yen and the US-Israeli war with Iran, which is driving up crude oil prices.

Analysts expect core inflation to accelerate beyond the Bank of Japan's 2% target in the coming months as these price pressures broaden.

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.'