| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| CPI - Y/Y | 2.7% | 2.3% to 3.0% | 2.5% | 2.6% | 2.5% |
| Ex-Fresh Food - Y/Y | 2.6% | 2.2% to 2.9% | 2.5% | 2.5% | |
| Ex-Fresh Food & Energy - Y/Y | 2.9% | 2.5% to 2.9% | 2.5% | 3.0% |
Highlights
JAPAN SEPT TOKYO CORE CPI (EX-FRESH FOOD) +2.5% Y/Y (AUG +2.6%), MEDIAN FORECAST +2.6% (RANGE: +2.2% TO +2.9%)
JAPAN SEPT TOKYO TOTAL CPI +2.5% Y/Y (AUG REVISED TO +2.5% FROM +2.6%); MEDIAN FORECAST +2.7% (RANGE: +2.3% to +3.0%)
JAPAN SEPT TOKYO CORE-CORE CPI (EX-FRESH FOOD, ENERGY) +2.5% Y/Y (AUG +3.0%); MEDIAN FORECAST +2.9% (RANGE: +2.5% TO +2.9%)
JAPAN SEPT TOKYO CORE/TOTAL CPI Y/Y CHANGES SAME AS IN AUG: ENERGY NOW UP BUT ITS GAIN OFFSET BY FREE DAY CARE, EASING RICE PRICES, LOWER DURABLES
JAPAN SEPT TOKYO CPI BIGGEST PUSHDOWN EFFECT COMES FROM UPGRADED FREE DAY CARE SERVICES -0.30 POINT VS. -0.02 PT IN AUG
JAPAN SEPT TOKYO CPI LIFTED BY STILL HIGH PROCESSED FOOD COSTS +1.59 PT VS. +1.70 PT BUT BIGGEST SEPT-GAP +0.42 PT CAUSED BY ENERGY +0.14 PT VS. -0.29 PT
JAPAN SEPT TOKYO CPI: ENERGY PRICE RISE IN PAYBACK FOR SEPT 2024 NATIONWIDE SUBSIDIES FOR ELECTRICITY, NATURAL GAS PUSHING DOWN ENERGY BY 5.3%
JAPAN SEPT TOKYO CPI: ENERGY +2.7% Y/Y (+0.14 POINT CONTRIBUTION), 1ST RISE IN 3 MONTHS VS. -5.3% (-0.29 POINT) IN AUG
JAPAN SEPT TOKYO CPI: PROCESSED FOOD +6.9% (+1.59 POINT) VS. +7.4% (+1.70 POINT) IN AUG
JAPAN SEPT TOKYO CPI: REGULAR RICE PRICE HIKE EASES TO +46.9% (+0.18 POINT ON TOTAL CPI) Y/Y FROM +67.8% (+0.24 POINT) IN AUG
JAPAN SEPT TOKYO CPI: HOTELS FEES +5.8% (+0.08 POINT) VS. +5.3% (+0.08 POINT) IN AUG; INBOUND SPENDING SLOWDOWN FADES AS YEN STABLE AFTER FIRMING EARLIER
JAPAN SEPT TOKYO TOTAL CPI +2.5% Y/Y (AUG REVISED TO +2.5% FROM +2.6%); MEDIAN FORECAST +2.7% (RANGE: +2.3% to +3.0%)
JAPAN SEPT TOKYO CORE-CORE CPI (EX-FRESH FOOD, ENERGY) +2.5% Y/Y (AUG +3.0%); MEDIAN FORECAST +2.9% (RANGE: +2.5% TO +2.9%)
JAPAN SEPT TOKYO CORE/TOTAL CPI Y/Y CHANGES SAME AS IN AUG: ENERGY NOW UP BUT ITS GAIN OFFSET BY FREE DAY CARE, EASING RICE PRICES, LOWER DURABLES
JAPAN SEPT TOKYO CPI BIGGEST PUSHDOWN EFFECT COMES FROM UPGRADED FREE DAY CARE SERVICES -0.30 POINT VS. -0.02 PT IN AUG
JAPAN SEPT TOKYO CPI LIFTED BY STILL HIGH PROCESSED FOOD COSTS +1.59 PT VS. +1.70 PT BUT BIGGEST SEPT-GAP +0.42 PT CAUSED BY ENERGY +0.14 PT VS. -0.29 PT
JAPAN SEPT TOKYO CPI: ENERGY PRICE RISE IN PAYBACK FOR SEPT 2024 NATIONWIDE SUBSIDIES FOR ELECTRICITY, NATURAL GAS PUSHING DOWN ENERGY BY 5.3%
JAPAN SEPT TOKYO CPI: ENERGY +2.7% Y/Y (+0.14 POINT CONTRIBUTION), 1ST RISE IN 3 MONTHS VS. -5.3% (-0.29 POINT) IN AUG
JAPAN SEPT TOKYO CPI: PROCESSED FOOD +6.9% (+1.59 POINT) VS. +7.4% (+1.70 POINT) IN AUG
JAPAN SEPT TOKYO CPI: REGULAR RICE PRICE HIKE EASES TO +46.9% (+0.18 POINT ON TOTAL CPI) Y/Y FROM +67.8% (+0.24 POINT) IN AUG
JAPAN SEPT TOKYO CPI: HOTELS FEES +5.8% (+0.08 POINT) VS. +5.3% (+0.08 POINT) IN AUG; INBOUND SPENDING SLOWDOWN FADES AS YEN STABLE AFTER FIRMING EARLIER
Market Consensus Before Announcement
Consumer inflation in Tokyo, the leading indicator of the national average, is expected to have stabilized under 3% in September, up 2.6% on year in September in the core measure (excluding fresh food), after having eased to 2.5% in August from 2.9% in July in light of easing upward pressures on processed food prices as well as national and provincial fiscal support.
The year-on-year rise in the total CPI is also seen ticking up to 2.7% after slowing to 2.6% in August to 2.9% in July. The annual rate for the core-core CPI (excluding fresh food and energy), which is little affected by fluctuations in gasoline and heating oil prices, is estimated at 2.9% vs. 3.0% the previous month.
The expected uptick in the core CPI comes from a possible year-on-year increase in overall energy costs in September 2025 as the government’s nationwide subsidies for electricity and natural gas pushed down energy prices by 5.3% in September 2024. Meantime, the subsidies for retail gasoline and heating oil remains in place.
Unique to the Tokyo prefecture (one of 47 jurisdictions) are the inflation-soothing effects of the city’s free base charge in water for four months from June as well as free day-care services that have been upgraded this month (expanded to the first child of eligible families from their second child onward).
The year-on-year rise in the total CPI is also seen ticking up to 2.7% after slowing to 2.6% in August to 2.9% in July. The annual rate for the core-core CPI (excluding fresh food and energy), which is little affected by fluctuations in gasoline and heating oil prices, is estimated at 2.9% vs. 3.0% the previous month.
The expected uptick in the core CPI comes from a possible year-on-year increase in overall energy costs in September 2025 as the government’s nationwide subsidies for electricity and natural gas pushed down energy prices by 5.3% in September 2024. Meantime, the subsidies for retail gasoline and heating oil remains in place.
Unique to the Tokyo prefecture (one of 47 jurisdictions) are the inflation-soothing effects of the city’s free base charge in water for four months from June as well as free day-care services that have been upgraded this month (expanded to the first child of eligible families from their second child onward).
Definition
The Consumer Price Index (CPI) is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Annual changes in the CPI represent the rate of inflation.
The Tokyo CPI data covers consumer prices in the capital’s 23 wards located in the eastern part of the Tokyo Prefecture but excludes the 26 cities and other smaller municipalities that occupy larger areas in other parts of the province (islands in the Pacific Ocean are also excluded). It is a leading indicator of the national average CPI as it is released about a month ahead of the national data. The survey for the Tokyo CPI is conducted on one day around the 12th (Wednesday, Thursday or Friday) each month and its results are released toward the end of the same month or early in the following month.
The national CPI has a larger energy weight of 712 out of 10,000, compared to 470 in the Tokyo data, because the shares of consumption of electricity, gasoline and heating oil tend to be bigger in the rural areas. There is only a slight difference in the weighting of food excluding perishables between the national data (2,230) and the Tokyo data (2,144).
The Tokyo CPI data covers consumer prices in the capital’s 23 wards located in the eastern part of the Tokyo Prefecture but excludes the 26 cities and other smaller municipalities that occupy larger areas in other parts of the province (islands in the Pacific Ocean are also excluded). It is a leading indicator of the national average CPI as it is released about a month ahead of the national data. The survey for the Tokyo CPI is conducted on one day around the 12th (Wednesday, Thursday or Friday) each month and its results are released toward the end of the same month or early in the following month.
The national CPI has a larger energy weight of 712 out of 10,000, compared to 470 in the Tokyo data, because the shares of consumption of electricity, gasoline and heating oil tend to be bigger in the rural areas. There is only a slight difference in the weighting of food excluding perishables between the national data (2,230) and the Tokyo data (2,144).
Description
The CPI has been in the spotlight as Japan struggled to make its way out of deflation. It is now closely monitored because the recent spike in energy and commodity markets and supply chain constraints during the global pandemic boosted Japan’s inflation rate to the highest in over four decades in 2022.
The report tracks changes in the price of a basket of goods and services that a typical Japanese household might purchase. The preferred measure is the year over year percent change. Markets will typically pay more attention to the core measure that excludes only fresh food because volatile food prices can distort overall CPI. A second core measure that excludes energy as well is also available. As the most important inflation indicator, the CPI data are closely monitored by the Bank of Japan. Rising consumer prices may prompt the BoJ to raise interest rates in order to manage inflation and slow economic growth. Higher interest rates make holding the yen more attractive to foreign investors, and this higher level of demand will place upward pressure on the value of the yen.
An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets and your investments.
Inflation (along with various risks) basically explains how interest rates are set on everything from your mortgage and auto loans to government securities. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities and your portfolio, often in a dramatic fashion.
By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
The report tracks changes in the price of a basket of goods and services that a typical Japanese household might purchase. The preferred measure is the year over year percent change. Markets will typically pay more attention to the core measure that excludes only fresh food because volatile food prices can distort overall CPI. A second core measure that excludes energy as well is also available. As the most important inflation indicator, the CPI data are closely monitored by the Bank of Japan. Rising consumer prices may prompt the BoJ to raise interest rates in order to manage inflation and slow economic growth. Higher interest rates make holding the yen more attractive to foreign investors, and this higher level of demand will place upward pressure on the value of the yen.
An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets and your investments.
Inflation (along with various risks) basically explains how interest rates are set on everything from your mortgage and auto loans to government securities. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities and your portfolio, often in a dramatic fashion.
By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.
