Japan reshuffles items in CPI basket as population ages

Tokyo

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 ageing 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.

Japan has the highest percentage of people aged 65 or more among countries belonging to the Organisation for Economic Cooperation and Development. Japan also has one of the lowest fertility rates in the OECD, and its greying demographics are changing consumption.

The Ministry of Internal Affairs, which compiles the 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.

Once finalised, revisions to the CPI basket will take effect for data from July 2016, the ministry said. Reuters