Japan core inflation hits 2.1%, above Bank of Japan target

Japan's core inflation rose to 2.1 percent in September, above the Bank of Japan's 2.0 percent target, official data showed Friday.

The reading, which excludes volatile fresh produce, was up from 1.7 percent in August, according to the internal affairs ministry.

Rising food prices helped drive the increase, while the weak yen also pushed up the cost of imported goods. The ministry said government support for gasoline and electricity fees reduced the impact on energy prices.

Abhijit Surya of Capital Economics said underlying inflation back above the central bank's target kept the case for further tightening “on solid ground.” He said news reports suggested the Bank of Japan may raise its inflation forecasts at its October meeting, which could set the stage for another rate increase in December.