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Revision to 1995 base for Wholesale Price Indexes (WPI)

Dec. 12, 1997
Bank of Japan
Research and Statistics Department

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1. Purpose of revision

In Wholesale Price Indexes, the base year for both indexes and weight calculation has been updated from 1990 to 1995 to reflect the structural changes of the Japanese economy and trade. Selected commodities have also been revised to enhance the accuracy of the indexes.

In March 1981, the Statistics Council recommended that the statistics of economic indexes, in principle, should be revised of the base year for both indexes and weight calculation every 5 years .

2. Contents of revision

(1) Update of the base year for both indexes and weight calculation

The Base year for both indexes and weight calculation has been updated from 1990 to 1995.

Revision of the base year for indexes: 1990 average = 100 1995 average = 100

Revision of the base year for weight calculation: calculation of weights based on the transaction value of 1995.

(2) Revision of selected commodities

The selected commodities have increased by 114 from the previous base. The total number of selected commodities amounts to 1,427.

Changes in the number of selected commodities
  1995
base(A)
1990
base(B)
(A)-(B)
Newly selected Omitted Combined Divided
Domestic Wholesale Price Index 971 945 +26 +54 -25 -15 +12
Export Price Index 209 184 +25 +52 -17 -12 +2
Import Price Index 247 184 +63 +67 -6 0 +2
Overall Wholesale Price Index 1,427 1,313 +114 +173 -48 -27 +16
Table : previous revision
(previous revision) (1,313) (1,253) (+ 60) (+175) (-122) (- 8) (+ 15)

Major points in revision of selected commodities are as follows:

  1. (a) In Export and Import Price Index, the selected commodities have been revised and expanded to reflect the structural changes in exports and imports in line with the industrialization of Asian countries in recent years. In Import Price Index, in particular, the commodities of clothing and household electrical equipment are focused on expansion.
  2. (b) In each index, commodities, which have newly appeared in the market or whose transaction values have increased rapidly in the recent 5 years, have been selected. In addition, some of the commodities which could not be selected until this revision have now been included, with the support from surveyed companies.

Principal examples of changes in selected commodities are as follows:

  1. (a) Domestic Wholesale Price Index
    (Newly selected commodities) Electrical machinery.....Cell station, Car navigation systems, Liquid crystal devices Processed foodstuffs.....Daily dishes, "Sushi" & box lunches, Green tea drinks
    (Omitted commodities) Textile products.....Cotton shirting Ceramic, stone & clay products.....Overglazes Electrical machinery.....Electric fans
  2. (b) Export Price Index
    (Newly selected commodities) Electrical machinery..... Connectors for electronic equipment, Micromotors Chemicals..... Xylene, Styrene monomer General machinery..... Refrigerators (excluding residential use), Air conditioners (excluding residential use)
    (Omitted commodities) Metals & related products..... Steel tableware Textiles..... Woolen & worsted yarn General machinery..... Typewriters
  3. (c) Import Price Index
    (Newly selected commodities) Machinery & equipment..... Audio equipment, Room air conditioners, Microwave ovens Textiles..... Blouses, T-shirts Chemicals..... Titanium oxide, Vinyl acetate monomer, Circulatory agents Foodstuffs & feedstuff..... Processed tomatoes, Ice cream Metals & related products..... Bolts & nuts, Metal pipe & tube fittings

(3) Changes in weights

The weights of Domestic Wholesale Price Index to Overall Wholesale Price Index have decreased. On the other hand, those of Export and Import Price Index have increased.

With respect to the changes in weights of each index, the weights of "Transportation equipment" have decreased in Export Price Index, because the domestic manufacturing center has shifted overseas. In Import Price Index, the weights of "Petroleum, coal & natural gas" have largely decreased reflecting the appreciation of yen and the price decline in the market. On the other hand, the weights of both "Electrical machinery" in Export Price Index, and "Machinery & equipment" in Import Price Index have increased.

Changes in Weights
  Weights to Overall Wholesale Price Index (in permillage terms) Principal Groups of Significant Change
in Weights
1995
base(A)
1990
base(B)
(A)-(B) Increased Group Decreased Group
Domestic Wholesale Price Index 792.86 796.76 -3.90 -Processed foodstuffs
-Electric power, gas & water
-Electrical machinery
-Iron & steel
-General machinery
-Textile products
Export Price Index 119.35 116.90 +2.45 -Electrical machinery
-General machinery
-Chemicals
-Transportation equipment
-Precision instruments
Import Price Index 87.79 86.34 +1.45 -Machinery & equipment
-Other primary products & manufactured goods
-Textiles
-Petroleum, coal & natural gas
-Metals & related products
Overall Wholesale Price Index 1,000.00 1,000.00 0    

(4) Some changes in grouping

Abolition of "Index for Special Grouping by Industry" in Export and Import Price Indexes

The publication of "Index for Special Grouping by Industry" in Export and Import Price Indexes has been discontinued in "Price Indexes Monthly Report" and "Price Indexes Annual Report" since the previous (1990 base) index revision, owing to the decline in needs for analyses. The index was abolished in this 1995 base index revision, because there had not been so much requests for its publication and the continuation of index compilation.

The index can be calculated by rearranging the basic grouping.

Change in the name of group

The name of "Metals" as "group" in Import Price Index has been changed to "Metals & related products" corresponding to the establishment of "Metal products" as "commodity class" and "subgroup" for newly selected commodities (Bolts & nuts, Fixture for fittings, Hand tools, Metal pipe & tube fittings).

3. Linked index

As in the case of the previous base index, the following 2 index series are calculated.

  1. (a) 1995 Base Linked Indexes
    1995 Base Linked Indexes are, in principle, retroactive to January 1960 as to the index series for "all commodities" and "group" in Domestic Wholesale Price Index, Export Price Index, Import Price Index, and Overall Wholesale Price Index. The linked index is calculated by using the linked coefficient (on the base of calendar year average) computed for each index series based on 1995.
  2. (b) Prewar Base Overall Wholesale Price Index
    Prewar Base Overall Wholesale Price Index (base period : 1934-36 average = 1) from January 1995 is compiled by using the linked coefficient (on the base of calendar year average) as to the index series for "all commodities" and "group" on prewar base and connected with the prewar base index of December 1994.

4. Switching to the 1995 base index for publication

Publication of the 1995 base index will start from the index for the first ten days of December 1997; the 1990 base index is available until November 1997.