Inflation Rate YoY

Japan Inflation Rate YoY is the 12 month change in the Consumer Price Index (CPI, a gauge of household purchase prices). Calculated since 1946 from prices in 167 municipalities by the Statistics Bureau of Japan. The basket holds 582 items in the 2020 base and 589 items in the current base. It covers goods and services bought by households nationwide, and Arabic media call it inflation in Japan. It comes in 3 series: headline All items, core less fresh food, and underlying less fresh food and energy. It is not a cost of living index: it holds base year patterns fixed, leaving out taxes, savings, land, home buying, and producer prices.

Prices are surveyed through the month, standard items once mid month. Some items are priced 3 times in 10 day periods. National results for the previous month arrive at 830 AM Japan time on Friday of the week including the 19th. Early Tokyo Ku-area results arrive at the same hour on Friday of the week including the 26th. Dates shift with holidays. Each release brings a leaflet, a Monthly Report, e-Stat data, and an Annual Report each spring. The published index is final, and 5 year base revisions link series without changing past rates. Seasonally adjusted series are recalculated each year back to January 2010.

10 major groups pull the headline apart, so core gauges show the trend.

• Food, weight 2626 of 10000: largest group of fresh fish, vegetables, fruit, and processed food.
• Housing, weight 2149 of 10000: rents plus imputed rent for owner occupied homes, tracked through surveyed rents.
• Transportation and communication, weight 1493 of 10000: second largest, with mobile phone charges from a typical usage model.
• Fuel light and water charges, weight 693 of 10000: electricity, gas, kerosene, and gasoline energy costs.
• Other groups: culture and recreation 911, furniture and household utensils 387, clothes and footwear 353, and medical care 477.

Education 304 and miscellaneous 607, each of 10000. 7 items use scanner data from electronics stores, and 3 use online prices for airfares, hotels, and overseas package tours. In calendar 2023 All items averaged 105.6 on a 2020 base of 100, up 3.2 percent, the largest rise in 32 years. Food rose 8.1 percent and added 2.17 points, while fuel light and water charges fell 6.7 percent and removed 0.53 points. All items less fresh food rose 3.1 percent to 105.2, its largest rise in 41 years. All items less fresh food and energy rose 4.0 percent to 104.5, its largest rise in 42 years. Goods rose 4.6 percent while services rose 1.8 percent.

1. Item index: For each item in each municipality, divide the comparison month price by the base year price. About 74 tariff items use model formulas built on typical usage.
2. Municipality aggregation: Average municipal item indices with municipal weights into national, district, and city group indices.
3. Laspeyres basket: Average item indices with fixed base year spending weights into groups and All items. The index equals 100 times base weighted prices now over base.
4. Seasonal gaps: Carry forward the last index for off market seasonal items. Exclude missing prices so group movement fills the gap.
5. Year on year rate: Take 100 times the gap between the comparison month index and the same month of the previous year. Divide by that previous index. Use full precision indices and round tables to 1 decimal place. Yearly averages are means of 12 monthly indices, except fresh food which uses monthly weights.
6. Contribution: Item contribution equals its index change times its weight, over All items weight and the previous All items index, times 100. Fresh food uses monthly weights.

For example, a 200 yen base price at 210 yen gives an item index of 105.0. At weight 2626 of 10000 with all else fixed, All items moves toward 101.3. Against 99.8 a year earlier, the year on year rate is about 1.5 percent.