May nationwide core CPI 3.2 yryr vs f39;cast 3.1
Rise in May slows from 3.4 yryr increase in April
Index stripping away fuel, fresh food up 4.3 yryr in May

TOKYO, June 23 Reuters Japan39;s core consumer inflation exceeded forecasts in May and an index excluding fuel costs rose at the fastest annual pace in 42 years, highlighting broadening price pressure that will keep the central bank under pressure to phase out its massive stimulus.

The increase was driven by steady price hikes for food and daily necessities, suggesting a drag on consumption from the rising cost of living facing households, analysts say.

The nationwide core consumer price index CPI, which excludes fresh food but includes energy items, rose 3.2 in May from a year earlier, data showed on Friday, slowing from 3.4 in April but exceeding market forecasts for a 3.1 gain.

Core consumer inflation has now stayed above the central bank39;s 2 target for 14 straight months, casting doubt on its view the recent costdriven inflation will prove temporary.

As the passthrough of rising costs runs its course, core consumer inflation will peak around summer, said Ryosuke Katagi, market economist at Mizuho Securities.

But companies may keep passing on costs for longer than expected. Risks to inflation are skewed to the upside.

The socalled corecore index that strips away the effects of both fresh food and fuel closely watched by the Bank of Japan BOJ as a key barometer of domestic demanddriven price trends…