TOKYO (Kyodo) -- Underlying inflation in Japan was steady in July amid rising energy costs but remained far below the Bank of Japan's elusive 2 percent target, government data showed Friday.
The nationwide core consumer price index, which excludes fresh food prices because of their volatility, rose 0.8 percent from a year earlier, the same pace of increase as June.
Prices rose for the 19th straight month, with the index sitting at 100.9 against the 2015 base of 100, according to the data released by the Ministry of Internal Affairs and Communications.
An increase in the prices of utilities such as electricity and gas as well as gasoline and kerosene, fueled by higher crude oil prices, continued to be the biggest driver of price gains.
Prices for hotels and other lodgings were also higher, according to the data.
Meanwhile, the prices of housing and household durables such as vacuum cleaners were lower.
Stagnant price growth has been vexing the BOJ, which last month tweaked monetary policy based on its expectation that it will take years to lift inflation toward 2 percent, the level it sees as consistent with a healthy economy.
Under the revamped measures, the central bank will allow long-term interest rates to rise slightly higher from its zero percent benchmark, while projecting inflation will continue to run below target at least through the year ending March 2021.
"Looking ahead, the CPI should continue to draw support from higher oil prices through the end of 2018, but that effect is likely to fade gradually into 2019," said Kazuma Maeda, an economist at Barclays Securities Japan Ltd.
"Although output gap improvements and wage growth will serve to underpin prices, we believe core CPI inflation is likely to converge to around 1 percent year-on-year."
Including fresh food, a surge in vegetable and seafood prices lifted broader consumer prices 0.9 percent, compared with a 0.7 percent increase in June.
A ministry official said at a briefing that prices continued to rise moderately, with no significant impact from flooding and landslides caused by torrential rains last month that devastated western Japan.
Excluding both fresh food and energy, consumer prices rose 0.3 percent from a year prior, accelerating slightly from a 0.2 percent increase the previous month.