Japan's core inflation accelerated in August, industrial output rose more than expected and demand for labor remained at its strongest in over 40 years in a further sign of solid momentum in the world's third-largest economy.
There was also some uneasiness about monetary policy after a summary of the Bank of Japan's most recent meeting showed one board member wanted an expansion of stimulus as consumer prices remain distant from the central bank's 2 percent inflation target.
Nationwide core consumer price index (CPI), which includes oil products but excludes volatile fresh food prices, rose 0.7 percent, matching a median market forecast. It was the eighth straight month of gains in the index, and followed a 0.5 percent rise in July.
"Prices are rising gradually. Exports are supporting output and domestic demand doesn't look too bad," said Hidenobu Tokuda, senior economist at Mizuho Research Institute.
"As long as Abe remains in power, we will see a continuation of his policies, but it all depends on the election."
Indeed, demand for labor remains at the strongest level since 1974 with data showing the jobs-applicants ratio held steady at 1.52 in August.
Industrial output also rose a larger-than-expected 2.1 percent in August from the previous month as manufacturers of construction equipment, autos, and electronic parts produced more goods.
Manufacturers surveyed by the government expect output to fall 1.9 percent in September and then expand by 3.5 percent in October.