By Leika Kihara
TOKYO, July 24 (Reuters) – Japan’s core consumer prices rose 1.6% in June from a year earlier, staying below the central bank’s 2% target for a fifth straight month as fuel subsidies offset rising raw material costs stemming from the Middle East conflict.
The rise in the core consumer price index (CPI), which excludes volatile fresh food prices, matched a median market expectation and followed a 1.4% increase in May.
An index that strips away both volatile fresh food and fuel, closely watched by the Bank of Japan as a better gauge of underlying inflation, rose 1.7% in June from a year earlier after a 1.8% rise in May.
The data will be among the factors the central bank will scrutinise at its policy meeting next week, where it is widely expected to keep interest rates steady and issue fresh quarterly projections.
The BOJ raised interest rates to a 31-year high in June in a landmark step in its policy normalisation, signalling readiness to tighten further as it focuses on taming price pressures from the energy shock triggered by the U.S.-Israeli war on Iran.
(Reporting by Leika Kihara; Editing by Thomas Derpinghaus and Sam Holmes)
