Japanese core consumer prices rose for the eighth straight month in June from year-earlier levels, data showed today.
Other data showed a slight worsening in the unemployment rate although job availability improved, while household spending declined.
The nationwide core consumer price index (CPI), which excludes fresh food, rose 0.6 per cent in June from a year earlier, matching market expectations.
The figures underscored an end to deflation and kept expectations intact for a gradual rise in interest rates.
Core CPI has been rising steadily since November, and the Bank of Japan (BOJ) has said it expects prices to keep rising as demand is beginning to exceed supply on the back of a firmer economy.
The central bank raised interest rates for the first time in six years on July 14th, lifting the key overnight rate to 0.25 per cent from zero.
With a steady economic expansion and rising prices, markets expect the BOJ to nudge up interest rates again at least one more time this year.
Governor Toshihiko Fukui has said the central bank will not conduct successive rate increases as the Federal Reserve has, and that any rate rises would be gradual. The BOJ's next policy-setting meeting is on August 10th-11th.