By Leika Kihara
TOKYO, Jan 23 (Reuters) – Japan’s core consumer inflation slowed in the year to December but stayed above the central bank’s 2% target, data showed on Friday, keeping alive market expectations of future interest rate rises.
At a two-day meeting concluding later on Friday, the Bank of Japan is widely expected to keep its key policy rate steady at 0.75%, but to signal its readiness to continue hiking borrowing costs as the economy continues a moderate recovery.
The core consumer price index (CPI), which excludes volatile fresh food costs, rose 2.4% in December from a year earlier, data showed, matching a median market forecast and slowing sharply from a 3.0% gain in November.
The slowdown was largely due to the base effect of last year’s jump in energy costs, which was caused by an end to government fuel subsidies.
An index stripping away both fresh food and fuel prices, which is closely watched by the BOJ as a better indicator of underlying inflation, rose 2.9% in December after a 3.0% increase in November.
The BOJ ended a decade-long, massive stimulus in 2024 and raised interest rates in several steps including in December on the view Japan was making steady progress in durably achieving its 2% inflation target.
(Reporting by Leika Kihara; Editing by Jamie Freed)
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