Underlying inflation in Japan is still slightly below the central bank’s target of 2%, Bank of Japan Gov. Kazuo Ueda said, underlining that it is in no hurry to raise interest rates.

Core inflation in Japan's capital hit 2.5%, marking the fastest annual pace in nearly a year, well exceeding the central bank's 2% target and keeping alive market expectations for further interest rate hikes.

Tokyos consumer price index (CPI) inflation accelerated in January, reaching a near two-year high as strong private spending sustained price growth. The headline CPI rose 3.4% year-on-year, up from 3% in December,

An uptick in inflation in the Tokyo metropolitan area and solid outturns in other key Japanese economic data support the Bank of Japan’s plan to pursue more interest-rate increases.