Tokyo core CPI rises 2.0 yryr in Sept, matches f39;cast
Index excluding fuel costs rises 1.6 yryr in Sept
Data shows Japan on track to durably hit BOJ target
Focus on whether firms will hike service prices in October

TOKYO, Sept 27 Reuters Core inflation in Japan39;s capital matched the central bank39;s 2 target in September, data showed, a sign the economy is making progress in meeting the criteria for further interest rate hikes.

While political and overseas economic uncertainties may prod the Bank of Japan to stand pat in October, the solid inflation reading will keep alive market expectations for another rate hike in December or early next year, analysts say.

The Tokyo core consumer price index CPI, which excludes volatile fresh food costs, rose 2.0 in September from the previous year, data showed on Friday, matching the BOJ39;s target and the median market forecast.

It slowed from a 2.4 increase in August due largely to the resumption of government subsidies to curb utility bills. Tokyo CPI data is considered a leading indicator of nationwide prices.

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, increased 1.6 in September from a year earlier after rising at the same pace in August.

Service prices rose 1.2 in September after a 1.3 gain in August, suggesting that companies were passing on labour costs from rising wages as the BOJ projects.

The focus is now on…