A slight easing in consumer inflation is welcome news for the Japanese central bank, but stubbornly high food prices will be of concern for policymakers.

Japan's core inflation slowed in June but stayed above the central bank's 2% target for well over three years, highlighting lingering price pressures that back market expectations for further interest rate rises.

Despite losing his parliamentary majority after a strong showing by right-wing populists, Prime Minister Shigeru Ishiba wants to remain in office.

The increase in rice prices slowed marginally to a 100.2% increase year over year, down from 101.7% in May.

Japanese Prime Minister Shigeru Ishiba on Monday stressed the need to establish a common understanding among parties on the pros and cons of cutting the country's sales tax rate.

Voters angry at inflation turned to other parties, notably the "Japanese first" Sanseito, which made strong gains with its "anti-globalist" drive reminiscent of US President Donald Trump's agenda.

Japan’s inability to lift inflation is “one of the biggest unsolved challenges in the profession,” said Mark Gertler, a professor of economics at New York University who has studied the issue.

Japan holds Upper House elections every three years to fill half the chamber’s 248 seats. This year, 124 regular seats and one extra vacancy are being contested.