Japanese inflation rose slightly in August, with prices up 2.8 percent year-on-year, official data showed Friday, hours before the Bank of Japan was widely expected to leave interest rates unchanged.

Japan’s key inflation gauge accelerated in August for a fourth consecutive month, hours before the Bank of Japan is scheduled to wrap up its latest policy decision meeting.

Japan's core consumer inflation accelerated for the fourth straight month in August and tracked comfortably above the central bank's 2% target, data showed on Friday, keeping alive expectations for further interest rate hikes.

Profound shifts in the world economy could make inflation volatile for years to come, complicating efforts to control prices, but sticking with inflation-targeting regimes is still the best option, European Central Bank President Christine Lagarde said on Friday.

The European Central Bank must think hard about how it deals with risks and uncertainty in an era of more-volatile inflation and less clarity about monetary-policy transmission, President Christine Lagarde said.

ECB President Christine Lagarde praised the "remarkable" unwinding of inflation with minimal job losses, projecting inflation to hit target by 2025. However, she warned that significant uncertainties remain.