Japan's core inflation slows in December but stays above BOJ goal

By Leika Kihara

TOKYO, Jan 23 (Reuters) - Japan's core consumer inflation slowed in the year to December but stayed above the central bank's 2% target, data showed on ?Friday, keeping alive market expectations of future interest rate rises.

At a ?two-day meeting concluding later on Friday, the ?Bank of Japan is widely expected ?to keep ?its key policy rate steady at 0.75%, but to signal its ?readiness to continue hiking ?borrowing costs as the economy continues a moderate recovery.

The core consumer price index (CPI), ?which excludes volatile fresh ?food ?costs, rose 2.4% in December from a year earlier, data showed, matching a median market ?forecast and slowing sharply from a 3.0% gain in November.

The slowdown was largely due to the base effect of last year's jump in energy costs, which was caused by an ?end ?to government fuel subsidies.

An index stripping away both fresh food and fuel prices, which ?is closely watched by the BOJ as a better indicator of underlying inflation, rose 2.9% in December after a 3.0% increase in November.

The BOJ ended a decade-long, massive stimulus in 2024 and raised interest rates ?in several steps including in December on the view Japan was making steady progress in durably achieving its 2% inflation ?target.

(Reporting by Leika Kihara; Editing by Jamie Freed)