Slowing Consumer Sentiment and Inbound Demand

「During the period under review (April 2025 to March 2026), Japan's economy remained on a gradual recovery trend, supported by improvements in employment and income conditions, a recovery in inbound demand and services consumption, and other factors. On the other hand, in addition to the moderate rise in consumer prices, the impact of developments in the Middle East since the beginning of the year sustained upward pressure on prices and increased consumers' preference for saving, resulting in some weakness in consumer sentiment.」

「In addition to the gradual rise in consumer prices, the impact of the situation in the Middle East since the beginning of the year has prolonged inflationary pressure and heightened consumers’ inclination to economize, resulting in signs of weakness in consumer sentiment in some areas.」

「In addition to the risk that continued price increases would weigh on consumer sentiment, attention was required to various domestic and overseas developments, including volatility in Japan's financial and capital markets and geopolitical risks.」

「During the six-month consolidated accounting period under review, Japan's economy continued to recover gradually overall, despite some signs of stagnation, including the rise in consumer prices and the slowdown in sales of autumn and winter merchandise amid a succession of record-breaking hot days, supported by improvements in employment and income conditions.」

「In May, COVID-19 was reclassified as a Class 5 infectious disease, the improvement in consumer sentiment became clear, personal consumption and corporate business sentiment also recovered, and the economy continued its gradual recovery.」

「In April, with COVID-19 reclassified as a Class 5 infectious disease, the improvement in consumer sentiment became clear, personal consumption and corporate business sentiment also recovered, and the economy continued its gradual recovery.」

「The situation raised concerns that consumer sentiment would weaken due to the sharp rise in consumer prices since last autumn.」

「Meanwhile, conditions continued to require close attention due to risks that the surge in COVID-19 cases caused by the seventh wave and rising domestic consumer prices accompanying the weaker yen and higher resource prices could weigh on consumption, as well as risks that they could squeeze the profits of import-dependent companies.」

「As the impact of COVID-19 subsided nationwide and the government eased restrictions on people's activities, signs of recovery emerged, particularly in personal consumption.」

「In the healthcare and textile and apparel businesses, the prolonged decline in consumption in the domestic market due to COVID-19 resulted in continued difficult conditions.」

「From October onward, personal consumption gradually showed signs of recovery, partly because COVID-19 had temporarily subsided and vaccinations had progressed. However, employment conditions remained difficult and capital investment also showed signs of stagnation, leaving the economy overall still in the process of recovery.」

「During the first six months of the fiscal year under review, Japan's economy remained in difficult conditions, particularly in areas related to personal consumption, as the serious nationwide spread of COVID-19 led to the implementation of expanded measures to prevent the spread of the disease, including states of emergency, even as the Olympic and Paralympic Games were held.」

「In the healthcare and textile and apparel businesses, efforts were made to expand sales of antibacterial materials and other products, but the overall market slump caused by COVID-19 persisted, and the businesses continued to struggle.」

「In the healthcare business, efforts were made to expand sales of products addressing COVID-19, such as masks and antibacterial materials, but ordinary bedding struggled throughout the year due to declines in major occupational sales channels and at retail stores. In the textile and apparel business, sales to government demand, including masks, were strong and exceeded the previous year, but the prolonged slump in apparel market conditions lasted longer than expected, causing OEM sales to struggle throughout the year.」

「The healthcare business and textile and apparel business were slow to recover from the COVID-19 pandemic and recorded lower revenue than in the same period of the previous year.」

「The deterioration in market conditions caused by COVID-19 has persisted, and the decline in revenue in the clothing and ordinary bedding divisions is tending to widen.」

「In the clothing division, the autumn and winter market remained sluggish due to the consumption tax increase and adverse weather, and sales of spring clothing also suffered from the impact of COVID-19 from February onward. As a result, net sales fell below the previous fiscal year.」

「In the clothing division, net sales fell below the same period of the previous year, partly due to poor sales of autumn and winter clothing resulting from the consumption tax increase and the mild winter.」

「In the clothing division, strong domestic sales in China were offset by difficult conditions in Japan's apparel market, and net sales fell below the previous fiscal year.」

「In the textile and apparel business, efforts to generate demand for uniforms did not progress, but strengthening OEM sales produced some improvement in net sales despite weak demand for clothing.」

「In the healthcare business, ordinary summer bedding struggled, but efforts to focus on planning, manufacturing, and sales of health-business-related products with firm demand proved effective, and progress exceeded the pace of the same period of the previous year. In the textile and apparel business, although weak demand for clothing persisted, strengthening OEM sales produced some improvement in net sales and profitability, but the uniform business struggled due to weak activity.」

「In the healthcare industry, demand for some products, including functional bedding related to health, increased as health and sleep attracted attention, although ordinary bedding remained weak. In the textile and apparel industry, conditions gradually showed signs of recovery despite the impact of adverse weather.」

「The business environment was improving against a backdrop of a moderate recovery in personal consumption, although some areas remained challenging, with seasonal products affected by adverse weather.」

「Although the business environment generally showed a moderate improvement trend, some seasonal clothing and bedding products continued to struggle to gain momentum.」

「Although the business environment was generally showing signs of recovery, some divisions, including clothing, household goods, and certain high-priced products, remained somewhat sluggish.」

「Although some areas of the business environment were showing a moderate improvement trend, conditions remained difficult in areas such as high-priced goods and seasonal clothing and bedding due to the slowdown in spending by visitors to Japan and the effects of adverse weather.」

「In the textile and apparel industry, inbound demand had also reached a plateau, with the average spending per purchase by visitors to Japan trending downward, and sales of high-priced products declining in some areas. As a result, signs emerged that consumer appetite was beginning to take a pause, making conditions somewhat challenging.」