Japan corporate service price index up 7.1% in July; Dentsu feeling the pinch

August 27, 2008
By Ken Worsley

Last month, the news was that in June, Japan’s corporate price index had increased 5.6%, which was the highest rise seen since 1981. According to figures released by the Bank of Japan yesterday, July has far outstripped that figure, with wholesale prices showing a 7.1% increase, the highest seen in 27 years (which is still 1981).

According to the data, producer prices for petroleum and coal products increased 43.6% year-on-year, while while prices for iron and steel products jumped 26.7% and those for industrial chemicals were up 7.3%.

It’s also costing much more to ship goods around the country and overseas: Ocean freight prices were up 27.5% and international air freight cost 16.3% more than a year ago, while domestic air freight prices were up 6.5%.

A few corporate prices, however, were down. Advertising cost 1.8% less than a year ago, while software development prices were down 0.7%. With respect to advertising, costs at Japan four largest advertising agencies fell 2.3% while costs at others were down 0.5%.

Also yesterday, advertising giant Dentsu reported a 38% fall in quarterly profit. Shares in Dentsu are down about 18.5% from their price in June, closing at 212,000 yen on Wednesday afternoon.

Filed Under Advertising, Bank of Japan, Corporate Price Index, Economic Reports

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