Inflation in Tokyo has accelerated for the first time in eight months, a development that supports the Bank of Japan's path towards further interest rate increases.

Data released on Friday shows that Tokyo's core consumer price index (CPI), which excludes fresh food, rose 1.6% year-on-year in June, matching the median forecast.

The core-core CPI, which strips out both fresh food and energy costs, increased by 1.9%. This is the key inflation gauge closely monitored by the Bank of Japan. The overall CPI climbed 1.7%. The Tokyo CPI is widely regarded as a leading indicator for nationwide price trends.

The rise in the CPI was primarily driven by an increase in water charges following the expiration of a government subsidy. Energy prices continued to decline, a benefit stemming from gasoline subsidies implemented by the administration.

The acceleration in inflation reflects growing concerns among policymakers about upside risks to prices. Although Japanese inflation data has so far been suppressed by temporary government measures aimed at curbing living costs, the figures released on Friday will bolster the Bank of Japan's position to raise interest rates.