Economic uncertainty caused by slowing emerging-market economies, foreign-exchange volatility and a sharp decline in crude oil prices

「Amid continuing price increases, particularly for food and energy, attention became necessary regarding the economic outlook, including overseas economic developments. In addition to the continued depreciation trend of the yen, import costs remained elevated due to the impact of higher crude oil prices against a backdrop of worsening conditions in the Middle East. Furthermore, uncertainty in the external environment continued and affected Japan's domestic economy, due to developments concerning US trade policy and the outlook for China's economy, as well as the outbreak of armed conflict in the Middle East.」

「Looking ahead, resilient domestic demand is expected to continue supporting the economy, while overseas factors such as US trade policy, including tariffs, the persistence of high interest rates in Europe, and the adjustment of China's property market are viewed as downside risks. Close attention is also required regarding geopolitical risks in the Middle East, related energy-price volatility, and unstable movements in the financial and capital markets.」

「Although uncertainty originating overseas remains high, labor shortages are pronounced in Japan and wages are also trending higher. As a result, the economy is holding firm.」

「Global inflationary pressures remain, but price growth in the United States and Europe is trending lower despite fluctuations. Accordingly, central banks in various countries have begun signaling possible rate cuts, and attention must be paid to future developments and their impact on Japan's economy.」

「Global inflationary pressures have eased from their previous levels, but central banks continue to pursue restrictive policies. Some central banks have also begun signaling possible rate cuts, raising concerns about future developments and their impact on Japan's economy. Trends in import prices, including resource and energy prices and food prices, are another risk factor. Volatility risks arising from geopolitical factors in Ukraine, the Middle East, and elsewhere continue, leaving conditions highly uncertain.」

「The international financial environment is expected to tighten further, creating downside risks for the global economy, through higher recession risks and sharp foreign-exchange market volatility resulting from the spillover effects of monetary tightening by central banks, as well as China's property-sector insolvency and default issues and slower investment in emerging markets. The outlook is therefore expected to remain uncertain.」

「Regarding the economic outlook, concerns are growing that inflation will persist for longer due to the prolonged situation in Ukraine. In addition, the global economy remains exposed to various downside risks, including higher recession risks in advanced economies resulting from the spillover effects of monetary tightening by central banks, increasing default risks centered on the United States and developing countries, and the emergence of financial instability following the failure of several banks. The outlook is therefore expected to remain uncertain.」

「During the cumulative first quarter of the fiscal year under review, Japan's economy began to regain vitality, particularly in the food service and tourism industries, as the eighth wave of COVID-19 infections subsided without restrictions on activities being imposed and previously suppressed consumption gradually recovered. However, the recovery lacked momentum because resource and energy prices and food prices continued to rise due to the situation in Ukraine and the rapid depreciation of the yen. Overseas, although restrictions on economic activity have been eased, the slowdown has become pronounced under the impact of accelerating inflation and monetary tightening in response.」

「Supply chain disruptions and the situation in Ukraine appear likely to continue, raising concerns about prolonged inflation. In addition, the spillover effects of monetary tightening by central banks in countries including the United States are expected to further increase recession risks in advanced economies and default risks, particularly in developing countries, leaving the global economy exposed to various downside risks.」

「Regarding the economic outlook, concerns are growing that elevated inflation will persist, as supply chain disruptions and the situation in Ukraine appear likely to continue, compounded by tight labor markets in some advanced economies. In addition, the uncertain impact of COVID-19, the further increase in recession risks in advanced economies resulting from the spillover effects of monetary tightening by central banks including the United States, and increasing default risks particularly in developing countries mean that the global economy remains exposed to various downside risks and is expected to remain uncertain.」

「Regarding the economic outlook, the global economy remains exposed to various risks and is expected to remain uncertain. Supply chain disruptions and the prolonged situation in Ukraine have driven inflation expectations to unprecedented levels, while the spillover effects of monetary tightening by central banks in some advanced economies, including the United States, have raised concerns about increasing default risks, particularly in developing countries.」

「Regarding the economic outlook, the deepening crisis in Ukraine raises concerns about spillover effects on the global economy, while the prolonged global spread of COVID-19 is expected to further widen economic disparities both within and between countries. In addition, persistent inflation resulting from supply chain disruptions combined with soaring energy prices amid the worsening situation in Ukraine could impede growth, particularly in developing countries. The outlook is therefore expected to remain uncertain.」

「The economy proceeded amid various downside risks, including renewed infection spread caused by virus variants, supply chain disruptions, and rising inflation against a backdrop of sharply higher crude oil prices. Political instability was also increasing in the Middle East and Southeast Asia.」

「While booster vaccinations are being considered in countries where most people have completed 2 doses, some countries still have mostly unvaccinated populations. As disparities in vaccine supplies become more serious, the pandemic is expected to take a considerable time to end, and further widening of economic disparities both within and between countries is a concern. In addition, the economy remains exposed to various risks, including heightened tensions between the United States and China, and the uncertain conditions are expected to continue.」

「Regarding the economic outlook, improvements in productivity resulting from behavioral changes caused by the global pandemic and improved infection conditions following COVID-19 vaccinations are expected. However, the path to supplying vaccines worldwide remains unclear, and multiple COVID-19 variants have been confirmed. The pandemic is therefore expected to take a considerable time to end. In addition, volatility risks in the bond and equity markets are increasing, including from higher interest rates driven by expectations of an economic recovery, and the uncertain conditions are expected to continue.」

「During the cumulative third quarter of the fiscal year under review, Japan's economy suffered a major blow as restrictions on movement and activities were implemented in response to the global spread of COVID-19, resulting in the cancellation or postponement of most scheduled events, including the Tokyo Olympics.」

「During the cumulative second quarter of the fiscal year under review, Japan's economy was already facing concerns about a recession, with weakness beginning to emerge in corporate earnings and exports. Following the implementation of restrictions on movement and activities in response to the global spread of COVID-19, the decline in exports and imports became pronounced.」

「Regarding the economic outlook, the economy remains exposed to numerous risks, including US-China trade friction, the impact of the UK's withdrawal from the EU, political instability in the Middle East, and the spread of an economic contractionary mood caused by concerns about a global pandemic of a novel respiratory illness. The outlook is therefore expected to remain uncertain.」

「Regarding the economic outlook, in Japan it is impossible to foresee the impact on the economy of changes in capital investment and consumer sentiment resulting from frequent natural disasters and the consumption tax increase implemented in October 2019. In addition, the Tokyo Olympics-related demand boom is approaching its peak, and the outlook is deteriorating. Overseas, overall uncertainty is increasing due to US-China trade friction, developments concerning the UK's withdrawal from the EU, political instability in North Korea and the Middle East, and the Federal Open Market Committee's decision to lower the US policy rate target in July 2019 for the first time in 10 years and 7 months, followed by another cut at its September 2019 meeting. The outlook is therefore expected to remain uncertain.」

「Overseas, the outlook is expected to remain uncertain due to escalating trade friction, including higher tariffs imposed by the US administration on China, developments concerning the UK's withdrawal from the EU, and political instability in North Korea and the Middle East. In the United States, the Federal Open Market Committee decided in July to lower its policy rate target for the first time in 10 years and 7 months, further increasing overall uncertainty.」

「Overseas, the outlook is expected to remain uncertain due to escalating trade friction, including higher tariffs imposed by the US administration on China, uncertainty over the impact of developments concerning the UK's withdrawal from the EU on the global economy, and political instability in North Korea and the Middle East.」

「Meanwhile, regarding the economic outlook, in Japan it is impossible to foresee the impact on the economy of changes in capital investment and consumer sentiment caused by the consumption tax increase scheduled for October this year, in addition to the Tokyo Olympics-related demand boom approaching its peak. Overseas, the outlook is expected to remain uncertain due to the impact on the global economy of policy developments, including the US administration's trade policy, and developments concerning the UK's withdrawal from the EU, as well as political instability in North Korea and the Middle East.」

「In Japan, concerns remain about the impact of frequent natural disasters and rising crude oil prices, in addition to the Tokyo Olympics-related demand boom approaching its peak. Overseas, the outlook is expected to remain uncertain due to uncertainty over the impact of policy developments, including the US administration's trade policy, on the global economy, as well as political instability in North Korea and the Middle East.」

「In Japan, concerns are emerging about the economic impact of the July 2018 heavy rain disaster, in addition to the Tokyo Olympics-related demand boom approaching its peak. Overseas, the outlook is expected to remain uncertain due to factors including uncertainty over the impact of US trade policy on the global economy, concerns about a slowdown caused by higher US policy rates, and political instability in North Korea and the Middle East.」

「At the same time, the economy remains exposed to risks including concerns about a slowdown caused by higher US policy rates and mounting political instability in North Korea and the Middle East. The outlook is therefore expected to remain uncertain.」

「Turning to overseas economies, although concerns about a slowdown caused by higher policy rates continue to simmer in the United States, the economy remains strong, with stock prices reaching new all-time highs, supported by the effects of large-scale tax cuts under the new administration. Although downside risks remain in China and other emerging Asian economies, the recovery is expected to continue. Accordingly, despite some remaining areas of concern, the outlook is for the recovery trend to continue.」

「In the United States, the direction of policy under the new administration and its impact continued to require close attention, although the economy was steadily regaining strength. As for the economies of emerging Asian countries, including China, downside risks remained, although」

「Looking at overseas economies, the direction of policy under the new US administration and its impact in the United States continued to require close attention, although the economy was steadily regaining strength. While downside risks remained in the economies of emerging Asian countries, including China, recovery was expected to continue for the time being. Although some concerns remained regarding the economic outlook, the recovery trend was expected to continue.」

「Looking at overseas economies, the direction of policy under the new US administration and its impact in the United States continued to require close attention, although the economy was steadily regaining strength. While downside risks remained in the economies of emerging Asian countries, including China, recovery was expected to continue for the time being. Although some concerns remained regarding the economic outlook, the recovery trend was expected to continue.」

「Looking at overseas economies, the direction of policy under the new US administration remained unknown immediately after its inauguration, requiring close attention to developments. Although the economies of emerging Asian countries, including China, were expected to continue recovering, downside risks remained, and the economic outlook therefore continued to be uncertain.」

「The economic outlook remained uncertain, due to downside risks in emerging-market economies, including China, and concerns over the European economy associated with the UK's withdrawal from the EU.」

「In addition to the economic slowdown in emerging markets, including China, concerns over the European economy following the UK's withdrawal from the EU also contributed to the continued uncertainty surrounding the economic outlook.」