Tokyo core inflation stays above BOJ target for full year
Index excluding fuel rises 3.9 yryr, highest since 1982
Rise in food costs offset decline in fuel prices data
Data may keep alive expectations of BOJ policy tweak

TOKYO, May 26 Reuters Core consumer inflation in Japan39;s capital slowed in May, but a key index stripping away the effect of fuel hit a fourdecade high, underscoring broadening price pressure that may keep alive expectations of a withdrawal of ultraloose monetary policy.

The data for Tokyo, which is seen as a leading indicator of nationwide trends, showed companies continued to pass on rising costs to households in a sign inflationary pressure could last longer than the Bank of Japan BOJ projects.

The Tokyo core consumer price index CPI, which excludes volatile fresh food but includes fuel costs, rose 3.2 in May from a year earlier, government data showed on Friday, roughly matching a median market forecast for a 3.3 gain.

While inflation slowed from the previous month39;s 3.5, it stayed above the BOJ39;s 2 target for a full year as steady food price gains offset falling fuel costs, the data showed.

An index that strips away both fresh food and fuel costs rose 3.9 in May from a year earlier, marking the fastest pace of increase since April 1982 when Japan was experiencing an assetinflated bubble.

Inflation already appears to be overshooting the BOJ39;s forecasts. Prospects of higher wages are prodding more firms to pass on rising labour…