Core consumer prices in Japan's capital rise faster-than-expected

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Tokyo Oct core CPI rises 2.8% yr/yr vs f'cast +2.6%

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Index excluding fresh food, fuel rises 2.8% yr/yr in Oct

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Data keeps alive expectations of near-term BOJ rate hike

By Leika Kihara

TOKYO, Oct 31 (Reuters) - Core consumer prices in Japan's capital rose 2.8% in October from a year earlier, data showed on Friday, staying above the central bank's 2% target and keeping alive market expectations for a near-term interest rate hike.

The increase in the Tokyo consumer price index (CPI), which excludes volatile fresh food costs, compared with a median market forecast for a 2.6% gain. It followed a 2.5% rise in September.

A separate index for Tokyo that strips away both fresh food and fuel costs - closely watched by the BOJ as a measure of domestic demand-driven prices - rose 2.8% in October from a year earlier after a 2.5% increase in September.

The BOJ exited a decade-long, radical stimulus programme last year and raised short-term interest rates to 0.5% in January on the view Japan was on the cusp of sustainably hitting its 2% inflation target.

While consumer inflation has exceeded the BOJ's 2% target for well over three years, Governor Kazuo Ueda has stressed the need to tread cautiously in further rate hikes on uncertainty over the impact of U.S. tariffs on Japan's economy.

(Reporting by Leika Kihara; Editing by Sam Holmes)