Core inflation in Japan's capital in October dipped below the central bank's 2% target for the first time in five months, data showed on Friday, potentially complicating the central bank's quest to raise interest rates further.

TOKYO—Consumer inflation in Tokyo slowed below the Bank of Japan’s 2% target but expectations for near-term rate increases remain high, especially given the yen’s renewed weakness. The consumer price index for the Tokyo metropolitan area rose 1.

Inflation in Tokyo slowed below 2% for the first time in five months largely due to energy prices, as the country heads into a general election and the Bank of Japan mulls data for its policy decision next week.

Japan stocks were higher after the close on Thursday, as gains in the Transport, Rubber and Paper & Pulp sectors led shares higher. At the close in Tokyo, the Nikkei 225 added 0.26%. The best performers of the session on the