Uncertainty over the outlook for overseas and domestic economies and exchange rates

「However, concerns remain about the impact of domestic policy interest-rate trends on the financing environment and the real estate transaction market, while the environment surrounding the construction industry remains difficult because construction material prices remain high and the shortage of skilled construction workers is becoming more serious.」

「At the same time, in addition to rising geopolitical risks, we need to continue monitoring energy price fluctuations stemming from the escalating situation in Iran, downside risks to the economy arising from U.S. trade policy, instability in financial markets and other developments.」

「Meanwhile, the outlook remains uncertain due to concerns that the sharp rise in prices could weigh on capital investment and personal consumption, that yen depreciation could persist, that geopolitical tensions could escalate in Ukraine and the Middle East, and that the United States could raise import tariffs.」

「The impact of continued price increases, large-scale domestic and overseas corporate acquisition activity for investment purposes, and US policy developments including trade policy also requires monitoring. Amid indications of developments that could lead to restructuring across multiple industries, the outlook remains uncertain.」

「The outlook is expected to remain uncertain due to the impact of domestic market economic trends following the US presidential election, geopolitical risks including the prolonged situation in the Middle East, downside risks to overseas economies caused by global monetary tightening, and higher prices resulting from yen depreciation.」

「Concerns remain over the impact on future corporate earnings of worsening conditions in Ukraine and the Middle East, higher raw-material and consumer prices, and an economic slowdown caused by companies restraining investment in response to rising interest rates.」

「However, the outlook remains uncertain amid global monetary tightening, a slowdown in the Chinese economy, developments in the Middle East and Ukraine, and the prospect of a shift in the Bank of Japan's interest-rate policy.」

「The uncertain outlook continued as a result of geopolitical risks, including the prolonged situation in Ukraine, downside risks to overseas economies caused by global monetary tightening, and higher prices resulting from yen depreciation.」

「The prolonged situation in Ukraine, higher raw-material and consumer prices due to yen depreciation, and economic slowdowns in developed overseas economies caused by rising interest rates are expected to have a potentially significant impact on corporate earnings.」

「As the post-pandemic surge in demand has run its course, global efforts to contain inflation continue unabated. With the possibility of a recession being raised, future performance is difficult to forecast, and caution toward capital investment is spreading. The outlook for the Company's orders is therefore expected to remain challenging.」

「In addition to the effects of supply-chain disruptions and logistics-system disruptions, including higher raw-material prices and delivery delays, the Russian invasion of Ukraine on 24 February of the previous year further accelerated the global rise in raw-material and consumer prices. This led to a shift away from central-bank monetary easing.」

「The Russian invasion of Ukraine on 24 February further accelerated the global rise in raw-material and consumer prices, leading to a shift away from central-bank monetary easing. In the United States, concerns over inflation, partly due to firm labor supply and demand, also increased. The Federal Reserve ended its quantitative easing policy, which had continued for 2 years, and raised the policy rate by an exceptional 0.25% in March 2022, 0.5% in May, and 0.75% in June, July and September.」

「In addition to the effects of supply-chain disruptions and logistics-system disruptions, including higher raw-material prices and delivery delays, the Russian invasion of Ukraine on 24 February accelerated the global rise in raw-material and consumer prices. This led to a situation in which central banks began moving away from monetary-easing policies.」

「In addition, the spread of COVID-19 overseas and in Japan since the beginning of the year before last, together with vaccination trends and developments regarding variant strains, has caused supply-chain disruptions and logistics-system disruptions, resulting in higher raw-material prices and delivery delays. The impact on the global economy, including Japan, remains uncertain. The Russian invasion of Ukraine, which began suddenly in February of this year, has also caused a further rise in raw-material prices, and the outlook includes the prospects for a ceasefire.」

「Although the economy is recovering, the outlook remains uncertain and economic weakness is expected to persist. Factors include trends in Omicron infections, oil prices that initially fell due to the impact of Omicron after reaching high levels amid expectations of an economic recovery but subsequently faced relatively tight supply and demand, global supply constraints affecting manufactured components due to COVID-19, and concerns over the situation in Ukraine.」

「However, new infections in the United States, the country with the highest number of infections, have been increasing, with daily cases fluctuating between 20,000 and 100,000. Given the global supply constraints affecting manufactured components as well, the uncertain economic conditions are expected to persist despite signs of an economic recovery.」

「During the first 3 months of the consolidated fiscal year, Japan's economy, both overseas and domestically, was affected by the global spread of COVID-19, which emerged at the beginning of the previous year. The number of infections had exceeded 197 million and deaths had exceeded 4.2 million. Globally, central banks implemented monetary easing, the new US administration implemented fiscal measures totaling $1.9 trillion, and governments provided employment assistance. Lockdowns were eased and reimposed in succession, and vaccination gradually became more widely available worldwide from the end of the previous year. However, concerns over the spread of the Delta variant indicate that the uncertain economic conditions are likely to persist.」

「In addition, the global spread of COVID-19 overseas and in Japan since the beginning of the previous year, together with vaccination trends and developments regarding variant strains, means that the impact on the global economy, including Japan, remains uncertain.」

「During the first 9 months of the consolidated fiscal year, Japan's economy, both overseas and domestically, was severely affected by the global spread of COVID-19 since the beginning of the previous year. The number of infections had exceeded 103 million and deaths had exceeded 2.23 million. Globally, restrictions on movement to prevent infections were promoted while efforts were made to revive the economy. Although conditions initially showed signs of stabilizing, the third wave has recently led to restaurant closures and restrictions on movement in Europe.」

「During the first 6 months of the consolidated fiscal year, Japan's economy, both overseas and domestically, was severely affected by the global spread of COVID-19 since the beginning of the year. The number of infections had exceeded 46 million and deaths had exceeded 1.2 million. Globally, restrictions on movement to prevent infections were promoted while efforts were made to revive the economy. Although conditions initially showed signs of stabilizing, the second wave has recently led to a growing number of European countries imposing lockdowns.」

「During the first 3 months of the consolidated fiscal year, Japan's economy, both overseas and domestically, was severely affected by the global spread of COVID-19 since the beginning of the year. The number of infections had exceeded 16 million and deaths had exceeded 640,000. Globally, restrictions on movement to prevent infections, monetary easing by central banks and employment subsidies by governments continued alongside efforts to revive the economy. However, the timing of completion of vaccine and treatment development remained uncertain. In addition, the Hong Kong governance issue and developments involving the closure of US and Chinese diplomatic missions, against the backdrop of US-China trade friction, the outlook for a global economic recovery and oil price trends suggest that the uncertain economic stagnation is likely to persist.」

「During the consolidated fiscal year, Japan's economy, both overseas and domestically, was affected by the global spread of COVID-19, which originated in Wuhan, China, as the World Health Organization (WHO) declared a pandemic. The number of infections had exceeded 3.5 million and deaths had exceeded 250,000.」

「In addition, concerns over conflict in the Middle East remain unresolved. Taking into account oil price trends, the prospects for a resolution during the transition period for the UK's withdrawal from the EU by year-end, developments in the Chinese economy and emerging-market financial markets amid slowing growth, and the economic stagnation caused by the recent novel coronavirus, the uncertain outlook remains unchanged.」

「During the first 6 months of the consolidated fiscal year, Japan's economy was affected overseas by continuing deterioration in European manufacturing conditions, with low growth expected to persist. The European Central Bank was also assessing the effects of additional monetary easing. In the United States, employment remained firm, but business conditions were weak in both manufacturing and non-manufacturing industries, and the Federal Open Market Committee cut its policy rate for the first time in 10 and a half years. Against this backdrop, trade-policy risks arising from sanctions tariffs on China have not been dispelled. Taking into account oil price trends and developments in the Chinese economy and emerging-market financial markets, where economic growth is slowing, the uncertain outlook remains unchanged.」

「During the consolidated fiscal year, Japan's economy was affected overseas by the increasingly apparent deterioration in European manufacturing conditions and concerns over weak future economic growth. The likelihood of additional easing by the European Central Bank also increased. In the United States, employment remained firm, but business conditions continued to deteriorate, and the Federal Open Market Committee shifted its policy toward lower interest rates. Against this backdrop, trade-policy risks surrounding future US-China negotiations have not been dispelled, as trade with China has contracted partly because of sanctions tariffs on China. Taking into account oil price trends, including the issue of sanctions on Iran, and developments in the Chinese economy and emerging-market financial markets, where economic growth is slowing, the uncertain outlook remains unchanged.」

「However, although negotiations between the US and China are continuing, trade-policy risks, including import tariffs, have not been dispelled. Taking into account uncertainties related to oil price trends, including the issue of sanctions on Iran, and developments in the Chinese economy and emerging-market financial markets, where economic growth is slowing moderately, the uncertain outlook remains unchanged.」

「In Europe, the deterioration in business sentiment has continued alongside slower exports, while the European Central Bank has kept its monetary policy framework unchanged but halted new asset purchases. In the United States, employment and wages have remained firm, but there are signs of some deterioration in consumer sentiment and a downward trend in manufacturing business conditions. In addition, the Federal Reserve Board has suggested smaller policy-rate increases. Taking into account trade-policy risks, particularly those involving China, as well as oil price trends and developments in emerging-market financial markets including China, the uncertain outlook remains unchanged.」

「However, although negotiations between the US and China are continuing, trade-policy risks, including import tariffs and what is being called a trade war, have not been dispelled. Taking into account uncertainties related to oil price trends, including the issue of sanctions on Iran, and developments in the Chinese economy and emerging-market financial markets, where economic growth is slowing moderately, the uncertain outlook remains unchanged.」

「However, in addition to trade-policy risks such as import tariffs arising from US protectionism, uncertainties related to oil price trends and developments in the Chinese economy and emerging-market financial markets, where economic growth is slowing moderately, mean that the uncertain outlook remains unchanged.」

「With the midterm elections in view, the executive order issued in March imposing import tariffs on national security grounds, together with uncertainties over oil price trends, the situation in North Korea and trends among Islamist groups, means that the uncertain outlook remains unchanged.」

「The current moderate economic environment could change as a result of US tax reform, rising US long-term interest rates and the weakening dollar. In light of the lack of visibility regarding global developments, including the situation in North Korea and trends among Islamist groups, the outlook remains uncertain.」

「In addition to the lack of visibility regarding global developments, including the situation in North Korea and trends among Islamist groups, oil price trends influenced by the production-cut agreement among oil-producing countries and US shale oil production, as well as the continuing slowdown in emerging-market economies including China, mean that the highly uncertain outlook remains unchanged.」

「However, political uncertainty, including the investigation involving Russia under the Trump administration and the failure to establish key government positions, has continued. Although stock prices have performed well, uncertainty over developments in financial and economic conditions remains a risk factor. In addition to oil price trends following the production-cut agreement, the slowdown in emerging-market economies, including China, has continued, making the outlook difficult to predict. In Japan, the government's economic policies and the Bank of Japan's unconventional monetary policy have continued amid fluctuations in the yen, while oil prices, foreign exchange trends and the decline in support for the current administration following the Tokyo metropolitan assembly election have kept the outlook uncertain.」

「However, the policies promised during the election campaign by President Trump, who advocated an America First agenda, have not been implemented as expected, and uncertainty over their impact on financial and economic conditions, including the stock market, where expectations had been building, has become a risk factor. In addition to US shale oil production and oil price trends following the agreement by oil-producing countries to cut production, the slowdown in emerging-market economies, including China, has continued, making the outlook difficult to predict.」

「However, although numerous executive orders have been issued since President Trump took office on an America First platform, their potential impact on future financial and economic conditions remains highly uncertain. In addition to oil price trends following the agreement by oil-producing countries to cut production, the slowdown in emerging-market economies, including China, has continued, making the outlook difficult to predict.」

「In addition to oil price trends, the slowdown in emerging-market economies, including China, has continued, making the outlook difficult to predict. In Japan, although the government's economic policies and the Bank of Japan's unconventional monetary policy have continued and a shift from quantitative monetary policy to an interest-rate-centered policy has been announced, their effects have not clearly translated into an economic recovery. The outlook for oil prices and foreign exchange trends also remains uncertain.」

「The uncertainty surrounding the UK's withdrawal from the EU, oil price trends, and the continuing slowdown in emerging-market economies, including China, has made the outlook difficult to predict. In Japan, the continuation of the government's economic policies and the Bank of Japan's unconventional monetary policy, including the additional introduction of negative interest rates, has not translated into a clearly visible positive effect on the economic recovery. The outlook for foreign exchange trends, influenced by the UK's withdrawal from the EU, also remains uncertain.」