Deteriorating business environment due to yen appreciation, emerging-market economies and the UK's EU withdrawal issue

「Although conditions are expected to require attention as further price and interest-rate increases driven by higher crude oil prices, mainly due to the uncertain situation in the Middle East, remain a concern for Japan's economy, a moderate recovery is expected to continue, supported by improvements in employment and income conditions and the government's measures to address inflation.」

「Although Japan’s economy is expected to face conditions requiring caution, with further inflation driven by higher crude oil prices and concern over rising interest rates, mainly due to the uncertain situation in the Middle East, a gradual recovery is nevertheless expected, supported by improvements in employment and income conditions and the government’s measures to address inflation.」

「During the six-month interim accounting period under review, Japan's economy continued to recover moderately, with personal consumption recovering against a backdrop of improving employment and income conditions. However, the effects of US tariff measures and the prolonged record heatwave weighed on some industries, including the automobile industry and demand for autumn merchandise, where growth remained sluggish. In addition to the risk that continued price increases would weigh on consumer sentiment, conditions required attention to various domestic and overseas developments, including volatility in domestic financial and capital markets and geopolitical risks.」

「Furthermore, opaque conditions continued, including the risk of higher prices for energy resources such as crude oil due to the effects of the Bank of Japan's exit from negative interest rates, the weaker yen becoming entrenched in the foreign exchange market, and conflicts in Eastern Europe and the Middle East.」

「Conditions continued to require close attention to rising import-related costs due to the weaker yen and heightened geopolitical risks in Eastern Europe and the Middle East.」

「During the first nine months of the fiscal year under review, Japan's economy continued to recover moderately, supported in part by the effects of various policies, including the government's comprehensive economic measures to overcome deflation, as employment and income conditions improved. However, conditions required attention to the effects of rising consumer prices, including import prices due to the weaker yen, developments in the Middle East, and volatility in financial and capital markets.」

「Meanwhile, conditions continued to require attention regarding future developments, including continued increases in consumer prices against a backdrop of the weaker yen and higher resource prices, the Bank of Japan's further adjustment of its interest-rate controls, and growing geopolitical tensions overseas.」

「During the first quarter of the fiscal year under review, Japan's economy continued to recover moderately as employment and income conditions improved. Consumer sentiment clearly improved, partly due to the transition of COVID-19 to a Class 5 infectious disease in April, and personal consumption and corporate business sentiment also recovered. However, continued increases in consumer prices against a backdrop of the weaker yen and higher resource prices remained a matter requiring attention.」

「Meanwhile, concerns emerged over a widening divide between business categories benefiting from the weaker yen and higher resource prices and those adversely affected by higher costs resulting from rising import prices, as well as concerns that the sharp rise in consumer prices since last autumn would dampen consumer sentiment.」

「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.」

「Conditions continued to require close attention to downside risks associated with rising domestic consumer prices and developments in overseas markets.」

「Toward the fiscal year-end, uncertainty remained due to rising raw material prices resulting from the situation in Ukraine and other factors, as well as volatility in financial and capital markets.」

「During the first quarter of the fiscal year under review, Japan's economy showed signs of recovery due in part to progress in addressing COVID-19 and improvement in overseas economies, and conditions remained conducive to further improvement as vaccinations progressed. However, the prolonged application of states of emergency and measures to prevent the spread of the disease, mainly in major metropolitan areas, slowed the recovery, and personal consumption, particularly in food services, entertainment, and some retail segments, remained subdued.」

「Although the effects of COVID-19 have persisted and severe conditions are expected to continue for the time being, Japan's economy is expected to gradually move onto a recovery trajectory as vaccinations progress in the second half of the year. However, the new era of the new normal involves considerable uncertainty, and opaque conditions are expected to continue, including developments in overseas economies and new US-China friction.」

「During the first nine months of the fiscal year under review, Japan's economy recorded a contraction surpassing that of the Lehman shock due to the impact of the first wave of COVID-19. Although the economy subsequently showed temporary signs of recovery, the impact of the third wave of COVID-19 began to emerge from the second half of November.」

「Looking ahead, the stagnation of overseas economies is expected to persist, with a second wave larger than the first arriving in Europe and some countries beginning to implement forceful measures such as lockdowns. In Japan, although the economy is expected to show signs of recovery supported by the effects of the Go To Travel campaign, this is not expected to lead to a full-scale recovery, and the arrival of a third wave of COVID-19 is anticipated. Accordingly, the economy is expected to require some time to return to a recovery trajectory.」

「During the fiscal year under review, the Japanese economy remained on a moderate recovery trend in the first half as employment and income conditions continued to improve, supported in part by various policy measures. However, the impact of the consumption tax increase in October 2019 and, in the fourth quarter, the impact of the COVID-19 pandemic caused a sharp downturn toward the fiscal year-end, suddenly creating a severe business environment.」

「In the Textiles and Apparel Business, sales were sluggish at the Shanghai subsidiary's overseas business due to conditions in the Chinese market, in addition to the effects of the consumption-tax increase and a mild winter. However, earnings improved as the company worked to improve profitability by strengthening its planning and sales capabilities in Japan.」

「During the first six months of the fiscal year under review, business sentiment in the manufacturing sector tended to deteriorate against a backdrop of uncertain overseas factors, including the prolonged US-China trade friction. However, consumption recovered, supported by front-loaded demand ahead of the consumption tax increase and continued improvement in employment conditions, and the economy overall remained on a moderate recovery trend.」

「During the first quarter of the fiscal year under review, Japan's economy remained weak in exports and production partly due to the slowdown in overseas economies, although employment and income conditions continued to improve and the economy expanded moderately overall. However, developments required even closer attention regarding the potential impact on the domestic economy, including concerns over US-China trade friction.」

「However, conditions are expected to remain uncertain, and to continue to require close attention, because of factors including dramatic market changes accompanying the progress of the Fourth Industrial Revolution, international trade friction and overseas political and economic developments.」

「During the cumulative third quarter of the current fiscal year, Japan's economy continued on a path of gradual recovery, supported in part by various policy measures and improving employment and income conditions. However, developments required attention regarding the impact on the domestic economy of concerns over trade friction, the slowdown in the Chinese economy and other factors.」

「During the cumulative second quarter of the current fiscal year, Japan's economy continued on a path of gradual recovery, supported in part by various policy measures and improving employment and income conditions. However, developments required attention regarding the impact on the domestic economy of growing concerns over trade friction and other factors.」

「However, developments required attention regarding the impact on the domestic economy of delays in achieving the Bank of Japan's inflation target and growing concerns over trade friction resulting from the rise of protectionism worldwide.」

「However, conditions are expected to remain uncertain in terms of global political and economic developments, including the Korean Peninsula, and to continue to require close attention.」

「As employment and income conditions continued to improve, the cycle from income to spending began to function, and personal consumption also recovered gradually. However, conditions continued to require attention because of uncertainty in overseas economies and other factors.」

「While income and employment conditions continued to improve as a result of domestic policies, conditions continued to require attention because of uncertainty in overseas economies and other factors.」

「Overall, the economy remained on a path of gradual recovery. Although some areas of personal consumption continued to lag, exports, capital investment and other sectors showed signs of recovery. However, conditions continued to require attention because of uncertainty in overseas economies and other factors.」

「Japan's economy is expected to remain on a path of gradual recovery, given the extremely accommodative monetary environment, the government's economic measures, firm capital investment ahead of the 2020 Tokyo Olympics, and expected further improvement in the employment and income environment. However, continued close attention is considered necessary regarding uncertain overseas factors, including developments in the Chinese and European economies, the Korean Peninsula and foreign exchange markets.」

「During the cumulative second quarter of the current fiscal year, Japan's economy continued on a path of gradual recovery, as the employment and income environment remained firm due to the effects of various domestic policies, despite slower exports and production and stagnant corporate performance resulting from yen appreciation and uncertainty surrounding emerging-market economies.」

「Some companies saw growth stall due to the impact of yen appreciation, while the UK's exit from the EU also emerged as a new issue, and conditions continued to require close attention to foreign exchange markets and overseas economic trends.」