Japan is conducting a reshuffle of goods in its consumer price index basket that will ditch items on the kids’ menu in exchange for hearing aids to reflect changes in consumer spending caused by its rapidly aging population.
The reshuffle, which takes place once every five years, removes items from the basket that consumers are spending less on and replaces them with items that shoppers are buying more often.
Wine glasses also make way for cheap take-away coffee sold at the nation’s ubiquitous convenience stores in a sign that people prefer a pick-me-up to get them through a busy day over relaxing with a glass of red at the end of one.
Japan has the highest percentage of people aged 65 or more among countries belonging to the Organization for Economic Co-operation and Development. Japan also has one of the lowest fertility rates in the OECD, and its graying demographics are changing consumption.
Consumer prices are a hot topic in the country because the central bank has launched a massive quantitative easing program to guide inflation to 2 percent and vanquish the risk of returning to deflation.
However, core inflation, which excludes fresh food but includes energy, is hovering at just 0.1 percent and pessimists say it could take years for the central bank to hit its price target.
The Ministry of Internal Affairs, which compiles CPI, will remove 32 items in total from the basket and add 33 new items, according to a proposal on its website. Once the revisions are complete, there will be 585 items in the basket.
The ministry will also adjust the weights assigned to each item based on fourth-quarter household spending data.
This change could see an increase in weighting for utilities and household renovations, but the weight of flat-panel TVs could be reduced.
Once finalized, revisions to the CPI basket will take effect for data from next July, the ministry said.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.