Political, Foreign Exchange and Regulatory Risks in Overseas Operations

「During the consolidated fiscal year, the global economy continued on a path of moderate growth, particularly in major countries, but uncertainty about the outlook persisted due to developments in trade policy and geopolitical risks, including the worsening situation in the Middle East since February 2026.」

「During the consolidated fiscal year, the global economy continued on a path of moderate growth, particularly in major countries, but uncertainty about the outlook persisted due to developments in trade policy and geopolitical risks, including the worsening situation in the Middle East since February 2026.」

「During the interim consolidated accounting period, the global economy remained uncertain due to the strengthening of U.S. trade policy and persistent geopolitical risks.」

「The risk that high interest rates in Europe and the United States, the stagnation of China's real estate market and weaker overseas economies resulting from the situation in the Middle East will weigh on Japan's economic activity continues.」

「Regarding the outlook for the future social and economic environment, close monitoring of the global economy is expected to remain necessary due to factors including the impact on energy and raw material prices and procurement costs from continued inflation and monetary tightening policies in various countries and heightened geopolitical risks, such as the escalating situations in the Middle East and Ukraine, as well as the emergence of China's excessive debt problem.」

「Regarding the outlook for the future social and economic environment, the global economy remains uncertain due to rising inflation and costs against the backdrop of the protracted Russia-Ukraine situation and heightened geopolitical risks, including the escalating situation in the Middle East.」

「However, the outlook for the global economy remains uncertain due to the protracted Russia-Ukraine situation, global monetary tightening and other factors, and close monitoring remains necessary for downside risks to economic activity, including weaker overseas economies and foreign exchange fluctuations.」

「However, uncertainty about the outlook has increased further due to surging raw material, energy and consumer prices resulting from the protracted situation in Ukraine and other developments, sharp foreign exchange fluctuations, and rising interest rates accompanying changes in monetary policy, and close monitoring remains necessary.」

「However, in addition to global inflation and monetary tightening in various countries, the outlook remains difficult to assess and close monitoring remains necessary due to factors including rising raw material and energy resource prices and the impact on supply chains resulting from the situation in Ukraine and other developments.」

「However, in addition to rising raw material and energy resource prices and foreign exchange fluctuations caused by the rapid depreciation of the yen, the impact of COVID-19 also requires close monitoring, and the outlook remains uncertain. While moves toward economic normalization based on living with COVID-19 are progressing in many major countries, close monitoring remains necessary due to factors including rising raw material prices and the impact on supply chains resulting from the situation in Ukraine, which is expected to persist.」

「The business environment became increasingly difficult, with uncertainty about the outlook persisting more than before as the worsening situation in Ukraine increased downside risks to the global economy through higher resource and raw material prices, volatility in the financial and capital markets, supply constraints and other factors.」

「In addition to the possibility that risks such as violations of local laws and regulations and misconduct may materialize, business performance and other aspects of operations could be adversely affected if the discovery of these risks is delayed due to factors including geographic distance.」

「Meanwhile, there are concerns that a rapid appreciation of the yen and the slowdown in the Chinese economy could adversely affect domestic economic conditions, and the situation is expected to remain difficult to view optimistically.」

「Meanwhile, there are concerns that heightened uncertainty in the international economy resulting from the slowdown in the Chinese economy and the UK's withdrawal from the EU could adversely affect domestic economic conditions, and the situation is expected to remain difficult to view optimistically.」

「We are exposed to risks including delays in or inability to conduct business or collect receivables, restrictions on remittances and other issues arising from rapid inflation, foreign exchange fluctuations, civil unrest, riots, war and litigation risk caused by uncertainty in political and economic conditions, deteriorating diplomatic relations and legal restrictions, as well as the risk of declining purchasing appetite resulting from amendments to laws and regulations or policy changes, including real estate tightening policies.」