Japan's Core Inflation Hits 2-Year High on Food, Energy Costs

Tokyo's core consumer prices rose 1.8% in July from last year, marking the highest increase since January. The surge was driven by higher food costs due to the Iran war and increased energy expenses on elevated crude oil prices.

The data may support growing speculation that the Bank of Japan will raise its benchmark policy rate next month. The central bank has flagged upside risks to inflation due to a weaker yen, which inflates import costs, and heightened demand for artificial intelligence.

Food prices excluding fresh items climbed 3.0% in July, with hamburger prices rising 13.2%. Household consumable goods such as dish washing detergents and bleaches gained 6.3%, accelerating from a 3.7% increase in June.