Consumer price inflation exceeded 2 percent for a second month as companies passed on costs of food and other daily necessities.
Core prices, which exclude fresh food, climbed 2.4 percent in August from a year earlier, the same pace as July, the Internal Affairs and Communications Ministry said Friday. The median estimate of 33 economists surveyed by Bloomberg News was for a 2.4 percent increase.
The fastest inflation in a decade won't spur an interest rate increase by the Bank of Japan because prices gains are likely to moderate as oil costs drop. Policy makers will probably keep the key rate at 0.5 percent, the lowest in the industrialized world, as the BOJ monitors the effect of the global financial crisis on Japan's shrinking economy.