Dec Tokyo core CPI up 2.4 yryr vs f39;cast 2.5
Index excluding fuel rises 1.8 yryr in December
Factory output falls in November on soft overseas demand
Data among factors BOJ will scrutinise at January meeting

TOKYO, Dec 27 Reuters Core inflation in Japan39;s capital accelerated in December while services inflation held steady, data showed on Friday, keeping alive market expectations for a nearterm interest rate hike.

Factory output, however, fell in November for the first time in three months, suggesting that softening overseas demand was taking a toll on the exportreliant economy.

The data will be among factors the Bank of Japan BOJ will scrutinise at its next policy meeting on Jan. 2324, when some analysts expect it to hike shortterm interest rates.

The Tokyo core consumer price index CPI, which excludes volatile fresh food costs, rose 2.4 in December from a year earlier, compared with a median market forecast for a 2.5 gain. It followed a 2.2 yearonyear rise in November.

Another index that strips away both fresh food and fuel costs, which is closely watched by the BOJ as a better gauge of demanddriven inflation, rose 1.8 in December from a year earlier after increasing 1.9 in November, the data showed.

Servicesector prices rose 1.0 in December after a 0.9 gain in November, underscoring the BOJ39;s view that sustained wage gains are prodding firms to charge more for services.

There39;s a chance higher wages will be passed onto services prices, which is…