Rebasing the Corporate Goods Price Index to the Base Year 2015 -- Main features of the rebasing and price developments in the 2015 base index --

The Bank of Japan plans to begin monthly releases of the Corporate Goods Price Index (CGPI), whose base year has been updated from the current 2010 to 2015, from February 10, when preliminary figures for January 2017 and revised figures for December 2016 are to be published. The rebasing of the CGPI focused on the following four themes whose initial purposes have been achieved: (1) incorporating new goods to accurately reflect changes in economic and industrial structures in price indexes; (2) reducing the reporting burden by actively utilizing external statistics/database and incorporating export and import transactions which are conducted without customs and administrative procedures; (3) expanding the scope for applying the hedonic regression method and introducing new quality adjustment methods which do not depend on the information from reporting companies; and (4) with the restrictions on basic materials, realizing a timely rebasing using alternative data for the calculation of weights. The number of commodities in the new index will change from the current 1,286 commodities to 1,213 commodities. The coverage of the adopted commodities (the transaction value of adopted commodities divided by the total transaction value used in the calculation of weights) increases from 81.6 to 82.9 percent for Producer Price Index (PPI) and from 68.2 to 70.5 percent for Export Price Index (EPI), while decreasing from 77.9 to 75.5 percent for Import Price Index (IPI). The number of sample prices will be 8,607, almost the same as 8,792 under the current base. In the revision of the quality adjustments methods, due in particular to the expanded application of the hedonic regression method to motor vehicles and television receivers, as well as the new application of the webscraped prices comparison method to home electric appliances, the levels of these indexes have changed to some extent. The ratio of commodities using external statistics/database has increased; in particular, they now account for about 20 percent of the total for the IPI, which includes many products linked with market conditions. Moreover, revisions of price survey methods have been steadily promoted to adjust the composition of sample prices and to reflect market prices by replacing about one-quarter of all sample prices. The comparison of the old and new indexes shows that their index levels and differences in year-on-year changes are small. Under the new index, the timing of scheduled retroactive revisions will be brought forward by one month from the current practice to early March and early September. The Bank will continue striving to revise price statistics uninterruptedly in the future by closely exchanging views with companies that cooperate for the surveys and with users.