Japan`s Fuzzy Math How should one react to Tokyo`s fuzzy math, after government apparatchniks added 34 items to the Japanese consumer price index, whose prices on balance were falling, and removed 48 goods and services that were becoming more expensive? The fuzzy math produced a stunning two-thirds decline in Japan`s core consumer inflation rate to 0.2% in July, from the 0.6% inflation rate reported in June, jolting Japanese interest rates. Tokyo`s new methodology for computing the core rate of consumer inflation, included revisions for all the 2006 data, and the difference is dramatic. In the month of May for instance, the new core CPI base showed zero inflation, compared with a 0.6% annualized rate under the previous rules. If correct, the Bank of Japan made a mistake in dismantling quantitative easing in March and in raising rates in July. Behind Tokyo`s sleight of hand, is a power play between the Japan`s ministry of finance, which aims to block Bank of Japan chief Toshihiko Fukui, from tightening monetary conditions. Already, Fukui has drained 22.7 trillion yen ($200 billion) from the banking system since March 9th, after dismantling a five year ultra-easy policy that pegged the overnight loan rate at zero percent.