What the Indicator Shows
The CPI tallies the prices of a wide range of items relevant to everyday life and turns them into an index with a base period set at 100. It is often discussed in terms of the year-over-year percentage change and serves as a representative indicator for gauging the degree of price increases or decreases; in Japan it is published monthly by the Ministry of Internal Affairs and Communications.
Relationship to Monetary Policy
CPI trends are considered one important input the Bank of Japan uses when deliberating monetary policy, such as the level of the policy rate. That said, the CPI figure itself does not directly determine future changes in monetary policy or stock price movement — it is evaluated comprehensively alongside other economic indicators.