TOKYO, Aug 21, 2026 (BSS/AFP) - Core inflation in Japan accelerated to 1.8 percent in July from 1.6 percent in June, official data showed Friday as the Middle East war and a weak yen push up prices.

The reading from the internal affairs ministry, which excludes volatile food prices, was in line with market expectations.

Excluding food and also energy prices, inflation was 1.9 percent, up from 1.7 percent in June and in line with consensus forecasts.

Unadjusted, inflation increased to 1.9 percent from 1.6 percent in June, also meeting average economist projections according to Bloomberg News.

While helping big Japanese exporters like Toyota and Sony, a weak yen increases the cost of imports like oil and food for resource-poor Japan.

Prime Minister Sanae Takaichi has moved to shield consumers from the sharp rise in oil prices resulting from the Middle East conflict with fuel and energy subsidies.

The Bank of Japan, which has a two-percent target for core inflation, hiked interest rates to a 31-year high in June and is expected to raise them again this year.

A BoJ rate hike could lift the yen.

The currency has given up around half of its gains that followed a historic joint market intervention by the United States and Japan last month.