July core CPI up 2.4 yryr, above BOJ target for fourth month
Excluding sales tax effects, CPI gain fastest since Dec 2014
Index excluding energy also perks up as price pressure broadens

TOKYO, Aug 19 Reuters Japan39;s core consumer inflation accelerated in July to its fastest in sevenandahalf years, driven by fuel and raw material prices and adding to the costs of living for households yet to see significant wage gains.

In a sign of broadening price pressure, the socalled core core index that strips away not just the impact of volatile fresh food but energy prices, also rose in July at the fastest annual pace in more than six years.

While inflation exceeded its 2 target for four straight months, the Bank of Japan BOJ is likely to remain an outlier in keeping monetary conditions ultraloose with price rises still modest compared with other major economies.

Food prices and a weak yen were the main culprits behind accelerating inflation, said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities, adding that he expects core consumer inflation to reach 3 this year.

As wage growth undershoots inflation, price hikes will weigh on real wages, squeezing household purchasing power ahead, he said, projecting the BOJ to keep policy unchanged through fiscal 2023 and 2024.

The core consumer price index CPI, which excludes fresh food prices, rose 2.4 in July from a year earlier, matching a median market forecast, government data showed on Friday.

That followed…