UPDATE 1-Japan's core inflation accelerates in September, stays above BOJ target

(Recasts with detail, background) * Sept core CPI rises 2.9% yr/yr, matches forecast * Index excluding fresh food, fuel up 3.0% yr/yr in September * Data among factors BOJ will scrutinise at next week's meeting By Leika Kihara TOKYO, Oct 24 (Reuters) – Japan's core consumer prices rose 2.9% year-on-year in September, data showed on Friday, staying above the central bank's 2% target and keeping alive market expectations of a near-term interest rate hike. The data will be among factors the Bank of Japan (BOJ) will scrutinise at its two-day meeting next week, when the board will debate whether to keep interest rates steady at 0.5% and issue fresh quarterly growth and price forecasts. The increase in the core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, matched a median market and accelerated from a 2.7% rise in August. An index stripping away both volatile and fresh food and fuel costs, which is more closely watched by the BOJ as a better gauge of underlying price trends, rose 3.0% in September from a year earlier, compared with a 3.3% increase in August. The BOJ exited a decade-long, radical stimulus programme last year and raised short-term interest rates to 0.5% in January on the view Japan was on the cusp of sustainably hitting its 2% inflation target. While consumer inflation has exceeded the BOJ's 2% target for well over three years, Governor Kazuo Ueda has stressed the need to tread cautiously in further rate hikes on uncertainty over the impact of U.S. tariffs on Japan's economy. (Reporting by Leika Kihara; Editing by Muralikumar Anantharaman)

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