Rise in Tokyo core CPI above forecast
Inflation excluding fresh food, fuel accelerates to 1.6
Govt assessment on industrial output upgraded after 2.8 rise in July

TOKYO, Aug 30 Reuters Core inflation in Japan39;s capital accelerated for a fourth straight month in August, data showed on Friday, tracking comfortably above the central bank39;s 2 target and backing market expectations of more interest rate hikes ahead.

The Tokyo core consumer price index CPI, which excludes volatile fresh food costs, rose 2.4 in August from a year earlier, faster than a median market forecast of 2.2 and the 2.2 gain in July.

A separate index that strips away the effects of both fresh food and fuel costs, closely watched by the BOJ as a broader price trend indicator, rose 1.6 in August from a year earlier after a 1.5 rise in July.

The accelerated Tokyo inflation, considered a leading indicator of nationwide trends, largely reflected a phaseout of government subsidies on utility bills and rising rice prices due to intensifying shortages caused by extreme heat.

Some onetime factors pushed up inflation but the underlying inflation trend will continue to moderate in coming months, said Takeshi Minami, chief economist at Norinchukin Research Institute.

But with wage growth expected to drive private consumption and push up inflation, the case is growing for the Bank of Japan to raise interest rates further, Minami said.

Separately, the Ministry of Economy, Trade and Industry upgraded its…