Japan's core inflation accelerated in August, industrial output rose more than expected and demand for labour remained at its strongest in over 40 years.

The data are further signs of solid momentum in the world's third-largest economy. 

The flurry of data should bolster optimism about the outlook for growth, though Prime Minister Shinzo Abe's decision to call a snap election has raised some uncertainty over economic policy. 

There was also some uneasiness about monetary policy after a summary of the Bank of Japan's recent meeting showed one board member wanted an expansion of stimulus as consumer prices remain distant from its 2% inflation target.

Japan's core consumer price index (CPI), which includes oil products but excludes volatile fresh food prices, rose 0.7%, matching a median market forecast. 

It was the eighth month of gains in the index in a row, and followed a 0.5% rise in July.

Today's figures also showed that demand for labour remained 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% in August from the previous month as manufacturers of construction equipment, car and electronic parts produced more goods. 

Japanese manufacturers surveyed by the government expect output to fall 1.9% in September and then expand by 3.5% in October. 

Politics, however, added a layer of uncertainty over the outlook for growth, with inflation still well behind the Bank of Japan's target. 

Abe this week dissolved the lower house and called a snap election for October 22. Initially, his ruling coalition looked certain to retain its majority. 

However, the outcome has been thrown into doubt because the largest opposition party has abandoned the election and will allow its members to run for a newly formed party that may be more popular with voters. 

Japan's economy expanded at an annualised 2.5% in the second quarter as consumer and company spending picked up. 

But price and wage growth remain weak with firms still wary of passing more of their profits to employees, forcing the Bank of Japan to push back the timing for reaching its price target six times since deploying a massive stimulus programme in 2013. 

The bank now expects inflation to hit 2% in the fiscal year ending in March 2020, arguing that a tightening job market and solid economic growth will gradually push up prices. 

Today's data also showed core consumer prices in Tokyo, available a month before the nationwide data, were up 0.5% in September from a year earlier, matching market forecasts. 

Household spending rose 0.6% in August from a year earlier in price-adjusted real terms, but this was below the estimate of a 1% increase and suggests that consumer spending is slowing slightly after a strong performance in second quarter.