Japan's Core Inflation Surges, Strengthening BOJ Rate Hike Case

Japan's core inflation accelerated in July to 1.8%, meeting market expectations and strengthening the case for a Bank of Japan rate hike at its September meeting.

The core consumer price index, which excludes volatile fresh food prices but includes energy costs, rose from 1.6% in June, according to data released by Reuters.

However, inflation remained below the BOJ's 2% target for a seventh consecutive month due to government subsidies designed to reduce fuel costs.

The central bank is expected to raise its policy rate to 1.25% from the current 1%, following a previous increase to 1% in June.