The World: Tokyo - Japan media agencies slash ad rates by 40 per cent

Japan's big three domestic media buying agencies - Dentsu, Hakuhodo and Asatsu DK - are reported to have made drastic cuts to their inventory in order to meet financial targets as the Japanese fiscal year draws to a close.

Industry sources say year-on-year discounts of up to 40 per cent on media space are being offered to clients, mainly as a result of the steady decline in TV revenues.

In December, Dentsu reported a year-on-year sales drop of 10 per cent for TV and 18 per cent for newspapers.

The scramble to sell comes amid reports of a fall in Japanese adspend of about 15 per cent.

Agency chiefs expect the situation to worsen over the year because of highly cautious consumer spending.