Core inflation in Japan's capital slows but stays above BOJ target
By Leika Kihara
TOKYO (Reuters) -Core consumer inflation in Japan's capital slowed in June but stayed well above the central bank's 2% target, data showed on Friday, keeping alive market expectations for further interest rate hikes.
The Tokyo consumer price index (CPI), which excludes volatile fresh food costs, rose 3.1% in June from a year earlier, government data showed, compared with a median market forecast for a 3.3% gain. It slowed from a 3.6% increase in May.
A separate index for Tokyo that strips away both fresh food and fuel costs - closely watched by the Bank of Japan as a measure of domestic demand-driven prices - rose 3.1% in June from a year earlier after a 3.3% gain in May, the data showed.
The BOJ exited a decade-long, radical stimulus programme last year and raised short-term interest rates to 0.5% in January on the view Japan was on the cusp of sustainably hitting its 2% inflation target.
Governor Kazuo Ueda has said the BOJ will keep pushing up borrowing costs if continued wage gains underpin consumption and allow firms to raise prices, thereby maintaining inflation stably around its 2% target.
The rising cost of living has drawn the attention of some BOJ board members including Naoki Tamura, who said on Wednesday the BOJ may need to raise interest rates "decisively" if upward inflation risks heighten.
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