Inflation Rate Ex-Food and Energy YoY

This gauge measures Japan underlying inflation with an analytical Consumer Price Index (CPI) series of household purchase prices. Its formal name is All items, less fresh food and energy, from the Statistics Bureau. It removes fresh food (3 groups) and energy (5 items) and keeps weight 8872 of 10000, or 88.7%, in a fixed basket. Weights come from the Family Income and Expenditure Survey for two-or-more-person households, with owner housing by imputed rent from equivalent rents.

It differs from All items, less fresh food, which includes energy, so confirm coverage every time. It measures pure price change for a fixed basket, not cost-of-living change from tastes, quantities or quality. It excludes direct taxes, insurance, savings, land and housing purchases and donations.

Store prices are collected on Wednesday, Thursday or Friday of the week including the 12th, with fresh foods surveyed 3 times monthly. Prices include tax, excluding short bargain, clearance and garage sale prices. National results for the prior month appear at 8:30 JST on Friday of the week including the 19th. Tokyo preliminary for the current month follows the same Friday rule for the 26th.

Calendar-year averages arrive with December and fiscal-year averages with March. Release includes a leaflet and monthly and annual reports with e-Stat data, and the month's figure is not revised.

• Food less fresh food: cereals, meats, dairy, cooked food and eating out.
• Housing: actual rents and imputed rent following private rents.
• Fuel, light and water other than energy: charges except five energy items.
• Furniture and clothes: furniture, household utensils, clothes and footwear.
• Medical care, education, culture and recreation: health, school and leisure.
• Transportation, communication and miscellaneous: transport, communication, tobacco, personal goods and services.

Calendar 2023 shows the split: All items rose 3.2% to 105.6, while this gauge rose 4.0% to 104.5, its largest rise in 42 years. Energy pulled the headline down as fuel, light and water charges fell 6.7% on electricity and city-gas subsidies, while food rose 8.1%. Furniture rose 7.9%, culture and recreation 4.3%, clothes and footwear 3.6%, transport and communication 2.5%, goods 4.6% and services 1.8%. That gap shows the gauge purpose: look past energy and fresh food to underlying pressure.

1. Item index: Divide comparison price by base-year average price, multiply by 100, then average municipal indices by area weights.
2. Laspeyres index: Combine items by base-year spending weights in a fixed basket up to 10 major groups and All items. Use unrounded values and tables show 1 decimal.
3. Missing prices: A missing item drops with its weight for that step and takes the remaining group movement, keeping group weights whole.
4. Fresh-food monthly weights: Multiply the annual weight by the month's purchase-quantity share and rescale the three groups to stay constant.
5. Residual gauge: Subtract weighted fresh food and energy from All items and divide by the remaining weight 8872 of 10000. For example, All items 108.5 with fresh food 125.3 (weight 379) and energy 112.0 (weight 749) gives 107.5.
6. Year-on-year rate: Divide the difference from the same month one year earlier by that index, times 100, from unrounded indices. If that month was 103.2, the rate is 4.2%, and index gaps use points, not percent.
7. Contribution: Multiply an item's move by its weight over All-items weight and the prior All-items index, summing to the total rate.
8. Linking and seasonal adjustment: Link old and new bases every 5 years without rewriting history and keep published rates. Adjusted values for 5 series including this gauge use Reg-ARIMA and X-11 in X-13ARIMA-SEATS with log transform and yearly reselection. Year-on-year comparison remains the standard trend view since it needs no seasonal model.