Japan's August data from Tokyo showed the core consumer price index excluding fresh food rising 1.8% from a year earlier, matching economists' forecasts and up from 1.7% in July.

Tokyo inflation is often treated as a leading gauge for nationwide price growth, though local government measures — such as tuition-fee reductions — can distort the readings from time to time.

The core-core CPI, which excludes both fresh food and energy, was up about 2% year on year, while the overall CPI increased 1.9%.

Major contributors to the gain were higher costs for education, entertainment, durable goods, and medical care.

Although measures aimed at easing living costs have been introduced, price pressures persisted, reinforcing expectations that the Bank of Japan could move on rates in the near term.

Markets priced in roughly an 82% chance of a September rate hike, with traders noting inflation risks remain elevated even after last month's U.S.-Japan policy actions.

BoJ Deputy Governor Ryozo Himino did not directly push back on market expectations, instead signaling that policymakers should remain mindful of upside risks to inflation from here.