Podium vs Print: "quite close to 2%" depends on the ruler

The podium. On Wednesday Ryozo Himino, a deputy governor of the Bank of Japan, told parliament that “underlying inflation is quite close to 2% and will likely converge to levels consistent with our price target”¹. He added that financial conditions “remain accommodative” even after last month’s rate rise, and that “delaying necessary adjustment to monetary support” could let inflation risks materialise¹. In plain words: more rises are coming, and the case rests on that one phrase about underlying inflation.

The print. “Underlying” is not one number. The bank’s own research staff publish six measures that strip out different kinds of noise, from fresh food and energy to policy effects such as subsidies and free school lunches². For August, the latest month available, they range from 1.3% to 2.6%²:

The broad measures, which exclude fresh food and institutional factors, sit at 2.6% and, without energy, 2.2%². The trimmed mean, which drops the most extreme price changes at both ends, is 2.2%². The narrower measures are lower: 1.8% excluding all food and energy, a weighted median of 1.5% and a mode of 1.3%². The trend is rising, though. The trimmed mean was 1.7% in May and has gone up each month since².

The gap. Desk arithmetic: the simple average of the six is 1.93%, which is indeed “quite close to 2%”. But three measures are at or above 2.2% and three are below 2%, and the low ones describe the typical price change, not the loud ones. Himino’s other argument is about pressure still to come: fuel and raw material costs, and “brisk global AI demand” boosting exports and investment¹. The trade print released the same morning complicates that. September exports were up 16.7% on a year earlier, well short of the 20.1% analysts had expected, the second monthly slowdown in a row, although chip shipments rose 49.4%³.

Verdict. The podium is fair about the middle and quiet about the spread. That is not a trick; it is what a committee does when it has to reduce six rulers to one decision. For you, the useful habit is to look at which ruler a speaker picks. A central bank that wants to keep raising rates will point at the measures above 2%, and the ones below 2% will be the first thing it is asked about if the next prints soften. Nothing here is advice.