Tokyo Inflation Accelerates, Boosting BOJ Rate Hike Expectations

Tokyo's core inflation rate accelerated for the third consecutive month in August, reaching 1.8% from a year earlier, according to government data released by Reuters.

This increase was slightly above the 1.7% rise economists had expected and brought Tokyo's core consumer price index (CPI) closer to the Bank of Japan's (BOJ) 2% target.

The August reading followed a 1.7% increase in July and was driven largely by continued price increases for food items, which is closely watched because it tends to provide an early indication of nationwide price trends.

Separate data showed that an index excluding fresh food and fuel prices, considered a better measure of underlying inflation by the BOJ, rose 2.0% in August, up from 1.8% in July.