Core inflation in Japan's capital slows in January

By Leika Kihara

TOKYO, Jan 30 (Reuters) - Core consumer prices in Japan's capital rose 2.0% in January from a year earlier, data showed on Friday, ?slowing from the previous month but matching the central ?bank's target.

The increase in the Tokyo core ?consumer price index, which excludes ?volatile costs ?of fresh food, compared with a median market forecast ?for a 2.2% rise. ?It followed a 2.3% increase in December.

A separate index for Tokyo that ?strips away both ?fresh food ?and fuel costs - closely watched by the Bank of Japan as a measure ?of demand-driven prices - rose 2.4% in January after a 2.6% gain in December, the data showed.

The BOJ raised interest rates to a 30-year high of 0.75% ?in ?December, taking another landmark step in ending decades of huge monetary support in ?a sign of its conviction Japan is progressing toward durably hitting its 2% inflation target.

The central bank retained its hawkish inflation forecasts last week and stressed its vigilance to price ?risks from a weak yen, signalling that policymakers intend to keep raising rates in a politically charged ?atmosphere.

(Reporting by Leika Kihara; Editing by Jamie Freed)