Tokyo Inflation Spikes to 1.8% as BOJ Rate Hike Looms

Tokyo's core inflation rate accelerated for a third consecutive month in August, reaching 1.8 percent year-over-year. This is the closest Tokyo has come to Japan's Bank of Japan (BOJ) target of 2 percent this year.

The core consumer price index, excluding fresh food, rose 1.8 percent in August after 7 percent in July, according to the internal affairs ministry. Durable goods, medical fees, rents, and restaurant costs drove the increase, despite government subsidies on household energy.

BOJ Deputy Governor Ryozo Himino said last week that the BOJ should pay greater attention to upside risks to prices than in the past. This statement was seen as a green light for a rate hike at the BOJ's September 17 meeting.