The Bank of Japan published the latest analysis data (August 26, 2025 edition) on indicators for capturing underlying inflation rates. This represents an important analytical tool aimed at removing the effects of various temporary factors from actually observed consumer price movements to more accurately grasp underlying price fluctuations.
Significance and Importance of Underlying Inflation Indicators In monetary policy operations, accurately grasping underlying inflation rates that are not influenced by short-term price fluctuations is extremely important. It is necessary to appropriately remove the effects that temporary shocks such as energy price fluctuations, food price fluctuations, consumption tax rate changes, and seasonal factors have on the consumer price index, and accurately assess the underlying inflationary pressure in the economy. By comprehensively analyzing multiple core indicators, the BOJ aims to improve the accuracy and ensure transparency of monetary policy decisions.
Details of Provided Analysis Indicators The BOJ calculates and publishes four major core indicators in conjunction with the release of the national consumer price index each month:
Ratio of Rising/Falling Items: Calculates the ratio of the number of items that rose versus fell compared to the same month of the previous year among consumer price index constituent items, measuring the breadth of price fluctuations
Trimmed Mean: Calculates an average value by statistically removing items showing extreme price fluctuations, mitigating the effects of temporary factors
Mode: Identifies the mode in the distribution of price increase rates, grasping the most typical price fluctuation patterns
Weighted Median: Calculates a median considering the importance (weight) of each item, suppressing the effects of extreme fluctuations
Publication Schedule and Continuity These indicators are regularly published at 2:00 PM, in principle two business days after the publication date of the national consumer price index, providing stable information to financial market participants and research institutions. On August 26, 2025, the latest charts (PDF file) and data (Excel file) were simultaneously published and provided in formats available for detailed analysis.
Theoretical Foundation and Research Results The methodology and characteristics of these core indicators have been theoretically and empirically analyzed in research papers by BOJ staff, including "Consumer Price Core Indicators and Their Characteristics" (Kawamoto, Nakahama, and Hougan, 2015) and "Performance of Consumer Price Core Indicators" (Shirasuka, 2015), receiving high academic evaluation.
This publication is positioned as part of the BOJ continuous efforts toward improving transparency of "data-based policy operations" and advancing academic research and policy analysis, aimed at realizing more sophisticated monetary policy decisions and effective market communication through multi-faceted analysis of underlying inflation rates.