Core inflation in Japan's capital accelerates, keeps BOJ rate hike view alive

TOKYO : Core consumer prices in Japan's capital rose 1.9 per cent in May from a year earlier, data showed on Friday, accelerating from the previous month and keeping alive market expectations the central bank will raise interest rates this year.

The rise in the Tokyo core consumer price index , a leading indicator of nationwide figures, matched a median market forecast and followed a 1.6 per cent increase in April. The BOJ ended eight years of negative interest rates and other remnants of its radical monetary stimulus in March as it judged that sustained achievement of its 2 per cent inflation target has come into sight.

Japan's economy shrank an annualised 2.0 per cent in the first quarter as companies and households reduced spending, casting doubt on the central bank's view of a moderate recovery.

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