By Kantaro Komiya

TOKYO (Reuters – Premium telescopes as well violin bows and speciality papers are breaking a long-standing deflationary trend in Japan. All have seen their prices rise by companies that believe they can charge higher without losing customers.

Japan Inc is nervous about increasing prices for the fear that it will alienate shoppers or lose market share. Years of stagnant wages and prices have caused Japan Inc to be afraid of charging higher. In the face of increasing costs, many firms have always chosen to tighten their belts.

The overall price increase is not significant, but more businesses are choosing to raise their prices. This is often due to increased transport and commodities costs.

Vixen Co Ltd holds 60% of the market in Japan for Astronomy Telescopes. Vixen Co Ltd plans to raise prices on its top-selling models to as high as 24% starting next month at 74,800-169.840 yen (650 to $1,500).

Yasuhisa Takuki stated that if costs increase and prices are not increased, it would have major consequences for Vixen. He added Vixen was also affected by the rising wages in China.

He said that there have been no consumer protests so far.

Tsuzuki explained that few people notice when the cost of an astronomy scope goes up. But a rise in the price of eggs or milk will be covered on all news shows.

Shirakawa Sogyo Co Ltd of Tokyo has increased the price of certain Swiss-made violins to 539,000 Yuan. This is a 36% increase.

Susumu Shirakawa, president of the company said that a stronger Swiss Franc has exacerbated already tight profit margins.

Because costs for everyone are rising, now is a good time to increase prices.

“Some of our rivals are also doing it.”

CAUTIOUS HIPKES

According to data, goods sold to businesses see higher price rises than products sold to consumers.

Inflation at wholesale, or the difference in the cost of goods between firms, rose to record levels in November. The core consumer price index meanwhile, increased 0.5% from last year, marking the highest level in two years.

While final goods prices increased by 4.6% in November, raw material costs soared to 74.6%.

Takao Sekine is the executive director of Food Marketing Research and Information Center in Tokyo. He said that retailers generally only allow suppliers to raise prices when raw material costs rise 20-30%.

Sekine stated that food companies have to use “shrinkflation” to offset their costs.

Businesses selling directly to others say that they have strict guidelines about increasing their sales.

Nippon Paper Industries Co Ltd accounts for approximately 40% of the domestic market for paper, except cardboard. It is planning to raise prices by between 5 and 15% over the next few weeks.

However, the company is restricting product growth in areas where it’s a market leader such as “gable-top”, which are used by milk producers according to Tetsuo Emawa.

Egawa explained that “it’s difficult for a company who’s not a leading player to be first to raise prices.”

TOUCHY TOPIC

Japanese companies frequently refer to price increases as something that they use as an option when corporate resources are exhausted. This is a common euphemism used for cost-cutting.

Sangetsu Corp increased the prices of wallpapers, curtains, flooring materials by approximately 15% in September. This was partially for the benefit of the industry.

Kokuyo Co Ltd is a leading stationery producer. It raised the cost of scissors, staplers (and other metal items) by approximately 8% beginning Jan. 1. But it restricted increases to no more than one sixth of its stationery products.

Hidekikubo said, “Our internal streamlining was not able to address the rising steel prices.”

($1 = 115.2700 yen)