Just like Jay Powell is surely hoping for some help from Mother Nature, the central bankers at the BoJ have to be wishing for more on their side of the Pacific. The US Federal Reserve will be looking for a repeat of last year’s Harvey and Irma effects out of Florence. It looks like they’ll need them. Japanese officials have been aided now twice in 2018 already, with inflation perking up again in August.

Japan’s CPI rose 1.3% year-over-year last month. It was the first time above 1% since the first three months of the year. In both cases, the acceleration was and is predicated on food. In the earlier instance, despite the massive hype, it didn’t last long at all. After getting as high as 1.5% in February, making policymakers practically giddy, the inflation index dropped back to just 0.6% two months later. There was noticeably less giddiness. 

Food prices, like oil prices, aren’t the inflationary basis these Economists are looking for. Though they won’t admit it publicly most times, they know it, too. Commodities can affect the CPI in the short run, of course, but they don’t do anything about keeping inflation up. In fact, food prices in particular, these spikes can be harmful to consumers since they aren’t being accompanied by broad-based income gains.

Food prices have jumped recently due to persistent bad weather. An earthquake that struck in early September could keep food prices high for another month, and the BoJ in the game as far as headline rates.

That’s pretty much all they have to show for QQE in 2018. Core rates, CPI indices excluding the volatile food and/or energy parts of the consumer basket, haven’t budged. Those are the only pieces that are moving inflation in Japan.

The Bank of Japan appears to be carrying out “stealth tapering” anyway. The central bank has trimmed its purchases of certain asset classes, including some longer-dated government debt. Just today, officials bought ¥50 billion in government securities at 25 years maturity and beyond. That’s down from the ¥60 billion pace in this segment established back in July – when stealth tapering was first cryptically announced.