The BoJ publishes five separate core inflation measures, two business days after each CPI print
Victoria Shinder2 min readThe Bank of Japan's Research and Statistics Department maintains a set of core inflation indicators, refreshed as a matter of routine at 2 p.m. two business days after each consumer price index release. The page explaining them is a useful statement of how the Bank thinks about underlying inflation.
Two families of measure are published. The first is a consumer price index excluding what the Bank calls institutional factors — administered and policy-driven price movements that say more about decisions than about demand. The second is a set of indicators derived from the distribution of price changes across items rather than from a fixed exclusion list: the trimmed mean, the weighted median, the mode, and a diffusion index of rising against falling items. The Bank's own framing is that such core indicators are essential for identifying the underlying inflation rate, but only alongside other evidence — it names the output gap, labour market tightness, inflation expectations and wage growth.
What it means
The distinction between the two families is the part worth carrying. A core index built by exclusion decides in advance which prices are noise; a trimmed mean or a weighted median decides afresh each month, from the shape of the distribution. In a period when the composition of inflation is itself changing, the two can diverge, and the divergence is information rather than a discrepancy: exclusion-based measures stay calm while the excluded categories move, and distribution-based measures pick up broadening before it reaches the headline.
The scheduling detail is a small gift to anyone building a Japan rates model. These are staff estimates on a fixed lag — two business days after the CPI, at a stated time — so they are not a signal about policy, they are the Bank publishing the same arithmetic it is doing internally. The caveat in the Bank's own wording deserves repeating: none of these five is the underlying rate. They are inputs, to be read next to wages and the output gap, which is precisely how the Bank says it reads them.