Tokyo inflation accelerates, boosts chances of Japan rate hike

Underlying inflation in the Japanese capital accelerated in December amid rising price pressures, data showed on Friday, keeping market expectations for a near-term interest rate hike.

The data will be among the factors the Bank of Japan will consider at its next policy meeting on Jan. 23-24, when some analysts expect it to raise short-term interest rates.

Tokyo’s core consumer price index, which strips out volatile fresh food costs, rose 2.4 percent in December from a year earlier, compared with a median market forecast for a 2.5 percent gain. That followed a 2.2 percent year-on-year gain in November, according to Reuters.

Another measure of demand-driven inflation, which excludes fresh food and fuel costs and is closely watched by the Bank of Japan, rose 1.8 percent in December from a year earlier after rising 1.9 percent in November, the data showed.