Inflation Rate MoM

It measures the monthly percent change in Japan's Consumer Price Index (CPI) for household goods/services nationwide in a fixed base-year basket. The Statistics Bureau of Japan compiles it monthly from Retail Price Survey prices and Family Income and Expenditure Survey weights. Owner housing is imputed rent, with energy, core less fresh and trend gauges separate. Policymakers use it as a thermometer, deflator and reference for pensions, wages, rents and Bank of Japan policy.

It tracks pure price change and excludes direct taxes, savings, property and gifts.

Monthly items are priced Wednesday to Friday in the week containing the 12th. Fresh food and flowers are priced 3 times in the weeks of the 5th, 12th and 22nd, while rents rotate quarterly. National results for the prior month appear at 8:30 Japan time Friday in the week of the 19th, in principle. Tokyo Ku-area preliminary figures for the current month follow the 26th-week Friday rule.

Each release brings a leaflet, monthly and annual reports plus analytical and seasonally adjusted series. Calendar-year averages arrive with December and fiscal-year with March. Released indices are never routinely revised. Items and weights change every 5 years, with old series linked and published rates never recalculated.

Monthly moves reflect prices across 10 major groups with fixed spending weights.

• Food, 27.54%: covers cereals, fish and seafood, meat, dairy, vegetables, fruit, oils, processed food and meals out.
• Housing, 21.82%: covers private, public and agency rents plus imputed rent for owners, the largest part.
• Transportation and communication, 14.44%: covers public/private transport, gasoline, cars, mobile phones and postage.

• Culture, recreation and education, 12.17%: covers leisure durables, services, publications, school fees, textbooks and tutoring.
• Fuel, light, water, medical, furniture and clothes, 18.35%: covers electricity, gas, kerosene, water, medicines, treatment, furniture, clothing and footwear.
• Miscellaneous, 5.70%: covers personal care, tobacco, insurance and childcare and nursing care.

The April 2014 consumption-tax rise shows why a MoM jump need not mean stronger demand. The CPI records prices including tax, so the 5% to 8% rise mechanically lifted taxable items by 2.9 points. Trial lifts were 2.1 all items, 2.0 less fresh food and 1.7 less food-energy yearly, with 1.9, 1.7 and 1.5 for April.

Full-year 2014 closed at 102.8, up 2.7%, housing stayed flat on weak imputed-rent tax effects, and the April jump was a one-off shift.

1. Comparison-period price: each item-place uses the simple average across stores, with 10-day items going 3 rounds.

With no mid-month mean, none is set, and unsurveyed items carry forward.

1. Base-period price: the base price averages base-year monthly prices for each item and place, with fresh food weighted by monthly quantities.

The rice illustration sets base at 2000 yen, the prior at 2100 and the current at 2142.

1. Item index: the index is 100 times comparison over base, then aggregates with municipal weights.

Rice scores 105.0 then 107.1, while model-based electricity 120.0 then 121.2.

1. Special collection: 9 electronics use scanner data and 3 travel items use web prices.

Complex fares use model formulas, and gaps are quality-adjusted.

1. Aggregation: the index is a spending-weighted mean across items/places in a fixed basket, on multi-person weights.

Imputed rent uses supplementary surveys, with monthly quantities for fresh food.

1. Month-on-month rate: the MoM rate is 100 times unrounded change over prior index, with weight-based contributions.

The aggregate moves from 116.82 to 118.21 for 1.19%, shown as 1.2%, with rice 0.38 and electricity 0.81 points.

1. Seasonal and chain measures: 5 seasonally adjusted series cover all items, less fresh food, less fresh food-energy, goods, services, beside 3 chain indices.

Seasonal factors use past indices, so one month shifts others.