Asian Economic Slowdown, Stronger Yen and Stagnant Personal Consumption

「Regarding the future of the Japanese economy, the outlook remains uncertain, with risks including changes in prices, interest rates and foreign exchange, higher crude oil prices associated with the increasingly tense situation in the Middle East, and uncertainty in the international situation.」

「The outlook for the Japanese economy is being clouded by concerns over further price increases caused by higher logistics and labor costs, expectations of higher interest rates, and developments in and the impact of the “Trump tariffs.”」

「Labor shortages in the transportation and tourism industries continue to worsen. In addition, the formation of a new administration and trends in foreign exchange rates and interest rates are making the economic outlook increasingly uncertain.」

「Labor shortages in the transportation and tourism industries continue to worsen, while concerns over higher interest rates are making the economic outlook increasingly uncertain.」

「Meanwhile, labour shortages in the transportation and tourism industries continue to worsen, while inflation, rising costs, and concerns about higher interest rates are also contributing to uncertainty about the economic outlook.」

「However, the worsening impact of labor shortages in the transportation and tourism businesses, together with rising prices, higher costs and concerns over higher interest rates, has emerged as a risk factor for the economic outlook.」

「The economic recovery has stalled. While concerns over a global recession are increasing, persistently high prices and rising costs, labor shortages and expectations of higher interest rates in Japan are increasing uncertainty over the outlook.」

「While concerns over a global recession are increasing, inflation and expectations of higher interest rates continue, and the outlook therefore remains uncertain.」

「Going forward, the risk factors will also include global inflation, the continued rapid depreciation of the yen and further labor shortages, particularly in the services sector, increasing uncertainty over the outlook.」

「Downside risks to production and exports are increasing due to shortages of components such as semiconductors and soaring resource prices. With risks including higher prices and the renewed spread of the novel infectious disease also emerging, uncertainty over the outlook is increasing.」

「Although the impact of the novel infectious disease is expected to diminish as vaccination is promoted and therapeutic drugs are developed, concerns also remain over the weaker yen, rising interest rates and prices, and heightened geopolitical risks. The outlook therefore remains uncertain.」

「Exports and production remained solid, but the recovery lacked strength because soaring crude oil prices and semiconductor shortages acted as constraints. Although the novel infectious disease had temporarily subsided, the sixth wave began at the start of the fourth quarter. In addition, soaring import prices caused by the weaker yen and other factors mean that an unpredictable situation is expected to continue.」

「During the first six months of the fiscal year, the Japanese economy was hit by the fifth wave following the fourth wave of COVID-19 infections. Services consumption, including dining out and accommodation, did not recover, and personal consumption continued to fluctuate.」

「During the first quarter of the fiscal year, the Japanese economy was hit by the fourth wave of COVID-19 infections. While exports and production remained solid, domestic personal consumption continued to stagnate, particularly in services such as dining out and accommodation.」

「As economic activity gradually resumed following the lifting of the state of emergency in June, personal consumption began to recover gradually, helped in part by demand-stimulus policies such as the Go To Campaign. However, with infections resuming their spread from December onward, the business environment remained severe and unpredictable.」

「The travel business posted a substantial decline in revenue because the spread of the novel infectious disease led to people refraining from both individual and group travel, cancellations and the suspension of tours.」

「As a result, for the first quarter of the current consolidated cumulative period, consolidated operating revenue was ¥21,064.395 million, down 14.6% year on year, while consolidated operating loss was ¥1,180.540 million, compared with operating profit of ¥153.313 million in the same quarter of the previous year.」

「Inbound and domestic consumption both declined as people refrained from going out, various events were cancelled or postponed, and entry restrictions were imposed on foreign tourists due to the spread of the novel coronavirus infection.」

「Concerns have emerged that the consumption tax increase and an increase in natural disasters will weaken consumer sentiment. Overseas, uncertainty continues amid US-China trade friction, moves toward the UK's withdrawal from the EU, and rising geopolitical risks in the Middle East.」

「During the first six months of the fiscal year, the Japanese economy remained uncertain as exports and capital investment stagnated amid a global slowdown caused by factors including US-China trade friction, while labor costs continued to rise due to tight labor supply and demand and fuel costs remained high. In addition, concerns have emerged that the consumption tax increase implemented in October 2019 will weaken consumer sentiment.」

「During the first quarter of the fiscal year, the Japanese economy continued to recover gradually against a backdrop of improving corporate earnings and employment conditions. However, stagnant exports and persistently high labor, raw-material and fuel costs continued to weigh on the economy. Going forward, concerns remain over sluggish consumption following the consumption tax rate increase and the outlook for US-China trade friction, and uncertainty is expected to intensify further.」

「Meanwhile, as tight labor supply and demand conditions and contraction of the consumer market due to population decline and aging continue, concerns about the outlook for the global economy are intensifying amid the emergence of U.S.-China trade friction, leaving the outlook for consumption increasingly uncertain.」

「Meanwhile, tight labor supply and demand conditions and contraction of the consumer market due to population decline and aging, changes in U.S. trade policy and slower economic growth in China and other parts of Asia, as well as large-scale natural disasters including earthquakes and torrential rains caused by typhoons that occurred one after another from the summer onward, have left the outlook for consumption uncertain.」

「In the taxi business, the number of operating general taxis declined as the number of drivers fell, while demand from individuals in urban areas remained weak as consumers continued to economize. However, revenue from Alps Kotsu Co., Ltd., which joined the Group in October 2017, contributed to revenue growth overall.」

「Meanwhile, domestic private consumption remains cautious due to a preference for saving and selective consumption, and the difficult business environment continues.」

「However, uncertainty surrounding overseas economies and trends in private consumption remains high, and conditions remain such that the outlook cannot be taken for granted.」

「In addition to uncertainty about the outlook for the global economy due to the change of administration in the United States, the UK's withdrawal from the EU and economic slowdowns in Asian countries, tight labor supply and demand conditions caused by population decline and population aging, as well as a continued trend toward market contraction, have persisted.」

「During the nine-month consolidated period ended in the third quarter, the Japanese economy continued to recover moderately, but remained lacking in strength as private consumption and capital investment struggled to grow. In addition to uncertainty about the outlook for the global economy due to the change of administration in the United States, the UK's withdrawal from the EU and economic slowdowns in emerging Asian countries, tight labor supply and demand conditions caused by population decline and a shrinking market also continued.」

「Amid growing uncertainty about the outlook due to economic slowdowns in China and other Asian countries and the UK's withdrawal from the EU, corporate earnings have struggled to grow as the yen appreciates. Tight labor supply and demand conditions and stagnant private consumption have also continued.」