Japan's corporate-service prices rise as oil surges
Wednesday, 26 December 2007
TOKYO, Dec 25 (Bloomberg): Japan's corporate-service prices rose at close to the fastest pace in 15 years, as record oil costs prompted businesses to charge more for transportation.
The prices companies pay for services such as rent and deliveries climbed 1.40 per cent in November from a year earlier, the same pace as October and near a 15-year high of 1.50 per cent reached in May and June, the Bank of Japan said in Tokyo Monday.
Crude oil rose above US$99 a barrel for the first time in November, squeezing profits and prompting companies to pass on costs to clients. Corporate service prices will keep rising even as a slowing economy reduces demand, Mamoru Yamazaki said.
"The demand for corporate services is expected to slow in tandem with the economic slowdown," said Yamazaki, chief Japan economist at RBS Securities Japan Ltd. in Tokyo.
"On the other hand, costs of oil and gasoline are still rising, and that will push up overall corporate service prices in the short term."
Tokyo's taxi operators this month raised fares for the first time in a decade to pay for increasing energy costs. The minimum fare now costs 710 yen ($6.20), up from 660 yen.
All Nippon Airways Company, Japan's largest domestic airline, plans to raise some domestic fares from April 1 because fuel costs may increase by "a few tens of billions of yen" next fiscal year, President Mineo Yamamoto told reporters last week.
Higher oil costs helped Japan's consumer price index rise for the first time this year in October. Core consumer prices, which exclude fresh food, rose 0.10 per cent from a year earlier.
Gains in core consumer prices will probably accelerate in coming months given the higher costs of oil and commodities, Bank of Japan Governor Toshihiko Fukui said last week.
From a month earlier, corporate service prices rose 0.10 per cent in November, the central bank said.
The prices companies pay for services such as rent and deliveries climbed 1.40 per cent in November from a year earlier, the same pace as October and near a 15-year high of 1.50 per cent reached in May and June, the Bank of Japan said in Tokyo Monday.
Crude oil rose above US$99 a barrel for the first time in November, squeezing profits and prompting companies to pass on costs to clients. Corporate service prices will keep rising even as a slowing economy reduces demand, Mamoru Yamazaki said.
"The demand for corporate services is expected to slow in tandem with the economic slowdown," said Yamazaki, chief Japan economist at RBS Securities Japan Ltd. in Tokyo.
"On the other hand, costs of oil and gasoline are still rising, and that will push up overall corporate service prices in the short term."
Tokyo's taxi operators this month raised fares for the first time in a decade to pay for increasing energy costs. The minimum fare now costs 710 yen ($6.20), up from 660 yen.
All Nippon Airways Company, Japan's largest domestic airline, plans to raise some domestic fares from April 1 because fuel costs may increase by "a few tens of billions of yen" next fiscal year, President Mineo Yamamoto told reporters last week.
Higher oil costs helped Japan's consumer price index rise for the first time this year in October. Core consumer prices, which exclude fresh food, rose 0.10 per cent from a year earlier.
Gains in core consumer prices will probably accelerate in coming months given the higher costs of oil and commodities, Bank of Japan Governor Toshihiko Fukui said last week.
From a month earlier, corporate service prices rose 0.10 per cent in November, the central bank said.