Instability in the International Situation and Geopolitical Risks

「Amid heightened concerns that armed conflict between the United States and Iran and other factors may cause further rises in resource prices, including crude oil, and greater instability in supply chains」

「The armed conflict in Iran that broke out at the end of the period has heightened tensions in the Middle East. The resulting disruption to crude oil supplies and instability in multilateral supply chains have increased uncertainty over the outlook, and concerns about the impact on the domestic economy are also growing.」

「The armed conflict in Iran that broke out at the end of the period has heightened tensions in the Middle East. The resulting disruption to crude oil supplies and instability in multilateral supply chains have increased uncertainty over the outlook, and concerns about the impact on the domestic economy are also growing.」

「During the interim consolidated accounting period, Japan's economy generally maintained a trend of moderate recovery. Although the conclusion of new tariff negotiations with the United States avoided a prolonged period of disruption, companies dependent on exports and others were inevitably affected, bankruptcies due to labor shortages increased, and personal consumption remained weak in response to high prices, leaving continued concerns about downside risks to the economy. Meanwhile, corporate earnings and the stock market remained solid, wage increases for a second consecutive year spread to small and medium-sized companies, improving employment and income conditions, and inbound consumption recovered, supporting regional economies. Looking ahead, however, there are many sources of uncertainty, including the risk of a global economic downturn caused by Trump tariffs, concerns about disorder in economic and fiscal policy, including measures to address labor shortages and high prices, amid increasing fluidity in national government administration, concerns about higher prices for underground resources, particularly crude oil, and risks of volatility in foreign exchange markets and policy rates. Concerns about an economic downturn resulting from the combined effect of these factors cannot be dispelled.」

「The outlook for the domestic economy is becoming increasingly difficult to assess, as concerns about the downward pressure on economic conditions from the new U.S. administration's trade and tariff policies are compounded by instability in foreign exchange markets and the risk of higher energy and raw material prices due to geopolitical risks in Eastern Europe and the Middle East.」

「In addition to higher prices caused by rising energy and raw material prices due to the yen's depreciation, there are many other concerns, including instability in the foreign exchange market and heightened geopolitical risks, and uncertainty about the economic outlook remains difficult to dispel.」

「During the consolidated fiscal year under review, Japan's economy generally maintained a trend of moderate recovery as economic and social activity normalized and picked up following the easing of the COVID-19 pandemic from the beginning of the fiscal year. However, persistently high import costs due to the prolonged Russia-Ukraine war and the yen's depreciation led to higher consumer prices, while personal consumption remained weak amid sluggish growth in real wages. In addition, concerns remain about the outlook for the domestic economy, including the impact of changes in the Bank of Japan's interest-rate policy on corporate activity going forward.」

「During the cumulative third quarter under review, Japan's economy was at a point where, although the global economy had finally overcome the COVID-19 crisis, it was being affected by the prolonged Russian invasion of Ukraine and the recurrence of a large-scale military conflict between Israel and Palestine, while China and European countries were stalling in their shift back to a growth trajectory due to worsening real-estate market conditions and accelerating inflation,」

「The global economy was generally experiencing slower growth as the prolonged Russian invasion of Ukraine, worsening China's real-estate downturn, and stagnant domestic demand resulting from monetary tightening by the United States and Europe and other advanced economies weighed on conditions,」

「During the cumulative third quarter under review, Japan's economy faced increasing uncertainty about the outlook for the global economy as resource and grain prices remained high due to the prolonged Russian invasion of Ukraine and the resulting sharp inflation. This heightened concerns about a slowdown in overseas economies in Japan as well. Although production activity showed signs of recovery, supported by resilient capital investment demand and easing supply constraints for materials, concerns also intensified that higher prices reflecting the yen's depreciation and rising production costs would reduce consumer appetite and put downward pressure on corporate earnings. The outlook for economic conditions therefore remains difficult to predict.」

「During the cumulative second quarter under review, Japan's economy was entering a phase in which the business environment for companies, which had previously been highly profitable, was gradually deteriorating and reaching a plateau. The global economy was seeing its recovery slow, particularly in advanced economies, as accelerating inflation, mainly caused by Russia's invasion of Ukraine, prompted policy rate hikes while the shift toward living with COVID-19 stalled. In Japan, consumer sentiment declined due to rising prices, particularly for essential goods, and the renewed spread of COVID-19, while uncertainty about the outlook intensified amid rapid yen depreciation and other factors.」

「During the cumulative first quarter under review, Japan's economy showed signs of a recovery in personal consumption, particularly services consumption, following the easing of restrictions on activities, while the pace of recovery in the global economy slowed due to economic disruption caused by higher prices accompanying Russia's invasion of Ukraine and the prolonged COVID-19 pandemic. At the same time, persistently high crude oil, raw material and food prices stemming from the Ukraine crisis, together with increased inflationary pressure due to the yen's depreciation, have raised concerns about a full-fledged recovery in the economy going forward.」

「Just before the end of the period, Russia's invasion of Ukraine broke out unexpectedly, resulting in surging food and energy resource prices, accelerating inflation, and rising risks of instability in the international financial system due to severe economic and financial sanctions against Russia and Russia's countermeasures,」

「During the cumulative third quarter under review, Japan's economy saw manufacturing-sector performance deteriorate overall against a backdrop of sluggish exports to China due to U.S.-China trade friction, although」

「During the cumulative second quarter under review, Japan's economy was entering a situation in which downward pressure on business sentiment was intensifying amid a slowdown in overseas economies, including rising tensions over trade issues between the United States and China and a downturn in China's economy, although」

「Concerns about the impact on the domestic economy of the review of export controls on semiconductor materials to South Korea and the signs of a plateau in the number of visitors to Japan, among other factors, are becoming increasingly apparent.」

「Amid growing concerns about the outlook for the global economy due to the confusion surrounding the UK's negotiations to leave the EU, intensifying trade friction between the United States and China, and slowing growth in China's economy,」

「During the cumulative third quarter under review, Japan's economy maintained a trend of moderate expansion, driven by improving employment and income conditions amid labor shortages, resilient personal consumption, solid exports and capital investment, and inbound consumption, even as concerns about the outlook for the global economy deepened due mainly to intensifying trade friction arising from the struggle for hegemony between the United States and China and the disorder surrounding the UK's negotiations to leave the EU.」

「During the cumulative first quarter under review, Japan's economy faced uncertainty in overseas political and economic developments, including the United States' shift toward protectionism and the resulting intensification of trade friction, political turmoil in EU countries over the acceptance of refugees, and heightened geopolitical risks in the Middle East and elsewhere, although」

「Given concerns about the impact of rising uncertainty accompanying financial-market volatility, downside risks associated with China's economic structural reforms, U.S. policy developments, and geopolitical risks centered on the Middle East and the Korean Peninsula, the outlook remains difficult to predict.」

「Although there are destabilizing factors, including the risk of shifts in the balance of power accompanying the United States' policy shift toward an America First stance and China's rise, as well as heightened geopolitical risks surrounding the Middle East and the Korean Peninsula,」