Japan's consumer price index (CPI) inflation rose to its highest level in 10 months in August, driven by increased consumption fueled by wage growth.
The core CPI, which excludes fresh food prices, grew by 2.8% year-on-year, in line with expectations, and up from 2.7% in July, according to government data released on Friday.
A key measure of inflation, which excludes both fresh food and energy, and is closely monitored by the Bank of Japan (BOJ), also increased, rising to 2% in August from 1.9% in the previous month.
Headline inflation climbed to 3% from 2.8%, marking its strongest reading since October of last year.
This uptick in inflation comes ahead of the BOJ’s meeting later in the day, aligning with the central bank’s forecast that inflation will rise in tandem with higher wages and increased private consumption. The underlying inflation rate also met the BOJ’s 2% annual target in August.
While the BOJ is expected to keep interest rates unchanged in its upcoming meeting, it is likely to raise rates further in the future as inflation is projected to continue growing in the coming months and into 2025.