Verifying Japanese inflation statistics using alt data

Daryl Smith, CFA, Head of Research (London)

Post feature

We summarise conclusions drawn from an academic paper comparing Japanese CPI data with a Neudata listed alternative data provider in an attempt to evaluate the accuracy of official statistics vs a ‘true’ inflation measure. The authors conclude that 1) the Japanese CPI is a poor predictor of actual inflation when measured inflation is below c.2%, and 2) the US PCE deflator methodology is superior to the Japanese CPI methodology. We also evaluate several alternative Japanese data providers and recommend further academic reading on this topic.

Neudata quick view

The authors attempt to show how accurately the Japanese CPI informs investors about