Japan's Core Inflation Stays Close to BOJ Target Ahead of Rate Decision

Japan's core consumer inflation remained steady near its central bank's target of 2% in August, according to data released on Friday. The core Consumer Price Index (CPI), which excludes volatile fresh food but includes fuel costs, rose 1.7% from a year earlier.

This follows an increase of 1.8% in July and highlights the growing price pressures that have solidified the case for a near-term interest rate hike by the Bank of Japan (BOJ). The BOJ is widely expected to raise interest rates to a 31-year high of 1.25% later on Friday.

The core inflation index, which strips away the effects of both volatile fresh food and fuel, rose 1.9% in August from a year earlier. This measure is closely watched by the BOJ as it provides a better gauge of demand-driven price pressures.