Japan's core inflation slows in August, stays above BOJ target

• Aug core CPI rises 2.7% yr/yr, matches forecast
• Index excluding fresh food, fuel up 3.3% yr/yr in August
• Data among factors BOJ will scrutinise at meeting ending Friday

By Leika Kihara

TOKYO, Sept 19 (Reuters) - Japan's core consumer prices rose 2.7% in the year to August, data showed on Friday, staying above the central bank's 2% goal but marking the slowest pace in nine months in a sign households are getting some respite from rising living costs.

The data will be among factors the Bank of Japan (BOJ) will scrutinise at its two-day meeting that ends on Friday, when the board is widely expected to keep interest rates steady at 0.5%.

The increase in the core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, matched a median market forecast and slowed from a 3.1% year-on-year rise in July.

An index stripping away both volatile and fresh food and fuel costs, which is more closely watched by the BOJ as a better gauge of underlying price trends, rose 3.3% in August from a year earlier, compared with a 3.4% increase in July.

The BOJ exited a decade-long, radical stimulus programme last year and raised short-term interest rates to 0.5% in January on the view Japan was on the cusp of sustainably hitting its 2% inflation target.

While consumer inflation has exceeded the BOJ's 2% target for well over three years, Governor Kazuo Ueda has stressed the need to tread cautiously in further rate hikes on uncertainty over the impact of U.S. tariffs on Japan's economy.

Under current forecasts made in July, the BOJ expects price pressures driven by rising rice and import costs to dissipate, and be replaced by more sustained price increases backed by solid consumption and wage growth.