June 20 (Bloomberg) -- Japan has the world's two most expensive cities after Osaka pushed London into third place, a survey by Mercer Human Resource Consulting showed.

Tokyo ranks first, unchanged from a year ago, while Moscow moves down one place to fourth, according to the survey, which compares 144 cities. The cheapest was Asuncion, the capital of Paraguay. The highest placed U.S. city was New York in 13th spot.

A cup of coffee plus service in Tokyo, for example, costs the equivalent of about $3.80 compared with $3.40 in New York and $3.27 in London. The survey, conducted in March, measures the costs of more than 200 items. Companies and governments use the data to gauge the purchasing power of employees transferred abroad.

``There have been some significant changes in the rankings this year which are primarily due to exchange rate fluctuations, particularly of the dollar and euro,'' Marie-Laurence Sepede, research manager at Mercer, said in an e-mailed statement.

The euro rose 5.9 against the dollar in the March 1, 2004, to March 1, 2005, period, according to Bloomberg data.

The survey uses New York as the base cost of living, and Tokyo is 34.7 percent more expensive to live in than the U.S. city compared with 30.7 percent last year. Osaka is 21.8 percent pricier than New York versus 16.1 percent in March 2004.

London is 20.3 percent more expensive compared with 19 percent in 2004, Moscow's level this year. People in Asuncion pay 40.3 percent of the expenses racked up living in New York.

The 12 percent appreciation of the Norwegian krone against the dollar pushed up Oslo's ranking to the 10th costliest city from 15th place in March last year.

Budapest, Warsaw

Budapest in Hungary climbed 10 places to 24th, level with Amsterdam, and is the most expensive city in the 10 countries that joined the European Union last year, the survey showed. Warsaw leapt to 27th from 76th, and Prague rose to 28th from 49th.

``Many cities in the new EU accession countries have risen sharply in the rankings this year, as they make strides to bring their economic infrastructure up to EU standards,'' Sepede said.

Winston Salem in North Carolina is the least expensive of the U.S. cities in the survey, dropping to 119 from 107th spot. The highest placed African city was Douala in Cameroon at No. 22.

Following is a table of the top 10 cities in the Mercer Human Resource Consulting Cost of Living Survey.

March 2005 March 2004

1. Tokyo 1. Tokyo 2. Osaka 2. London 3. London 3. Moscow 4. Moscow 4. Osaka 5. Seoul 5. Hong Kong 6. Geneva 6. Geneva 7. Zurich 7. Seoul 8. Copenhagen 8. Copenhagen 9. Hong Kong 9. Zurich 10. Oslo 10. St. Petersburg

To contact the reporter on this story: Kathrine Jebsen Moore in Edinburgh at kjebsenmoore@bloomberg.net.

Last Updated: June 19, 2005 19:10 EDT