Tokyo Core Inflation Hits 1.9% as Middle East Conflict Drives Prices

Tokyo's core consumer price index rose 1.9% in July, exceeding market forecasts and indicating broadening price pressures due to the Middle East conflict.

The data shows that prices of food and daily necessities continue to drive inflation, while service-sector inflation remains steady at 1.1%. The Bank of Japan's (BOJ) closely watched index, which strips away the effect of fresh food and fuel, rose 2.0% in July after a 1.9% gain in June.

The BOJ is expected to keep interest rates steady on Friday, despite raising them to a 31-year high of 1% in June as the economy faces mounting inflationary pressure from the war and a weak yen.