Japan's core inflation accelerated at its fastest annual pace in more than two years in April on steady rises in food costs, data showed on Friday, raising the odds of another interest rate hike by year-end.

Hotter-than-expected core inflation supports a Bank of Japan interest rate hike in July. The BoJ is expected to deliver a 25 bp hike and then stay put for a considerable time due to high uncertainty surrounding US tariffs.

The core inflation figure was higher than expectations of 3.4%. Headline inflation climbed 3.6% from a year ago. Japan’s core inflation accelerated to 3.5% in April, government data showed on Friday,