A measure of underlying inflation in Japan surged to a three-year high, with consumer prices excluding fresh food and special factors rising 3.2% year-on-year in September, accelerating from 2.6% in the previous month and well above the Bank of Japan's (BOJ) 2% target, a report released by the BOJ on Tuesday showed. This outcome provides support for authorities to continue raising interest rates and could reinforce market speculation about another near-term rate hike by the BOJ. The central bank already raised borrowing costs to 1.25% in September, accelerating the pace of monetary policy tightening to its fastest since 1990. The market widely expects the BOJ to maintain its policy settings at Friday's Policy Board meeting, but many anticipate the bank may announce that underlying inflation has finally reached its 2% target, more than 13 years after the target was established.