— Japan June Total CSPI Posts 33rd Straight Y/Y Drop; May -0.9%
— Japan June Total CSPI +0.3% M/M Vs May -0.3%

TOKYO (MNI) – Japan’s corporate service price index fell 0.7% in
June from a year earlier, the 33rd consecutive year-on-year drop, with
the pace of decline decelerating from a 0.9% fall in May, Bank of Japan
data released on Tuesday showed.

The June figure matched -0.7% y/y seen in April.

The downward pressure on prices has generally eased since total
CSPI posted a record drop of -3.8% in August 2009, which was the largest
decline since the BOJ began compiling CSPI data in January 1985.

The smaller year-on-year drop in June was mainly due to rises in
transportation, leasing and rental and advertising services.

The CSPI, which stood at 96.5 in June against 100 in the 2005 base
year, was up 0.3% from the previous month, posting the first m/m rise in
three months, after an unrevised -0.3% in May.

The smaller y/y drop in June compared with the drop in May was
caused by positive contributions from transportation (+0.13 point),
leasing and rental (+0.06 point) and advertising services (+0.05 point).

They outpaced negative contributions from “other services”
including building maintenance (-0.04 point) and information and
communications (-0.02 point).

The corporate services price index tracks prices for a wide range
of corporate services, ranging from finance and insurance charges to the
cost of shipping goods by road rail, air or sea.

It also includes software development costs, telecommunications
charges and legal and accounting fees.

In 2009, the BOJ changed the base year for its corporate service
price index to 2005 from 2000, which takes place every five years, while
reshuffling the services covered in the data to reflect more high-tech
and diversified business activity, effective September 2009 data.

Under the 2005 base year, the total CSPI hit a recent peak of 102.0
in July 2008, when demand from China to import iron ore and coal ahead
of the Beijing Olympics peaked, pushing up global ship chartering and
freight charges.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **

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