Japan’s July core inflation accelerates to 1.8%

Japan's core inflation surged to 1.8% in July, up from 1.6% in June, according to official figures released on Friday, the internal affairs ministry reported. The data, which excludes volatile food prices, aligns with market expectations. When food and energy prices are excluded, inflation rose to 1.9% from 1.7% in June, meeting consensus forecasts. Unadjusted inflation increased to 1.9% from 1.6% in June, also matching average economist projections, as reported by Bloomberg News.

The strengthening yen, a result of the Bank of Japan's interest rate hike to a 31-year high in June, could offset some of the impact of higher import costs for Japan, which is resource-poor. Prime Minister Sanae Takaichi has taken measures to shield consumers from the surge in oil prices due to the conflict in the Middle East through fuel and energy subsidies. The central bank has signaled its intention to raise interest rates further this year to achieve its target of 2% for core inflation.