But the use of a CPI target of sorts is more problematic than it appears. First, there is the issue of the accuracy of the CPI index itself, which BOJ Chief Hayami has mentioned several times in the past. Second, targeting inflation rates is closely associated with a theoretical construct known as the Taylor Rule . The headline figure includes both data for fresh food prices and imputed rents. So this would imply that the BOJ may be inclined to end the policy 'prematurely' if the official CPI measure starts to pick up.
Imputed rents are the rents that are theoretically paid by the people who own their own homes.
Without imputed rents, a rise in home ownership would actually hurt GDP as fewer people would be paying rent. It also has to be included when constructing the GDP deflator. I don't really see the need, other than if you want to be able to manipulate the data with a non-existent component that you can effectively just pick out of the air. But the real problem with imputed rents is that they are also assumed to be paid on apartments and other rental properties by the owners of said properties when they are actually empty. Thanks to the government's housing stimulus efforts, there has been a rise in home ownership in Japan, but if the 'price' of these rents are falling as fast as the CPI implies, at the very least, these two trends should cancel out.