As costs soar, some Japanese companies do the unthinkable: Raise prices

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TOKYO: Premium telescopes, violin bows and speciality paper are bucking a deflationary trend that has defined Japan for decades - all have had their prices hiked by companies confident they can charge more without losing business. Years of stagnant prices and wages have made Japan nervous about charging mo

TOKYO: Premium telescopes, violin bows and speciality paper are bucking a deflationary trend that has defined Japan for decades - all have had their prices hiked by companies confident they can charge more without losing business.

Vixen, which commands nearly 60 per cent of the local market for astronomy telescopes, plans to increase prices of its best selling lower-end models by as much as 24 per cent from next month, to 74,800 to 169,840 yen . A strengthening Swiss franc against the yen has added to the squeeze on already tight profit margins, company President Susumu Shirakawa said.

Final goods prices rose just 4.6 per cent in November even as raw material costs spiked 74.6 per cent. Even companies selling directly to other businesses say they are careful about the size of their increases. Japanese companies often describe price hikes as something they do as a last resort when costs cannot be absorbed by corporate efforts - a euphemism for cost-cutting.

 

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