Core consumer prices in Japan's capital rises 2.5% yr/yr in January

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Rise in Tokyo core CPI matches median market forecast

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Index stripping away fuel, fresh food rises 1.9% yr/yr

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Data come in wake of BOJ's interest rate hike last week

By Leika Kihara

TOKYO, Jan 31 (Reuters) - Core consumer prices in Japan's capital rose 2.5% in January from a year earlier, data showed on Friday, keeping alive market expectations for further interest rate hikes.

The increase in the Tokyo core consumer price index (CPI), which excludes volatile fresh food costs, matched a median market forecast and followed a 2.4% gain in December.

Another index that strips away both fresh food and fuel costs, which is closely watched by the Bank of Japan as a better gauge of demand-driven inflation, rose 1.9% in January from a year earlier after increasing 1.8% in December, the data showed.

The BOJ raised interest rates last week to their highest since the 2008 global financial crisis and revised up its inflation forecasts, underscoring its confidence that rising wages will keep inflation stable around its 2% target. (Reporting by Leika Kihara; Editing by Sandra Maler)