Overseas Shifts and Price Competition with Chinese Companies

「During the current consolidated accounting year, geopolitical risks continued, including developments in trade and tariff policy in North America, the prolonged situation in Ukraine, the downturn in the Chinese economy and heightened political and diplomatic tensions caused by worsening Japan-China relations.」

「During the interim consolidated accounting period (1 April 2025 to 30 September 2025), the global economy remained highly uncertain, with the outlook for the international trade and investment environment becoming increasingly unclear due to developments in North American trade policy, the prolonged situation in Ukraine and the downturn in the Chinese economy. In addition, exchange rates continued to fluctuate sharply, and factors contributing to instability, including higher import costs, remain evident.」

「During the current consolidated accounting year (1 April 2024 to 31 March 2025), the global economy remained unstable due to prolonged geopolitical risks, including the Russia-Ukraine war and the situation in the Middle East, the slowdown of the Chinese economy, higher international raw-material prices and increased import costs resulting from yen depreciation, as well as policy developments in various countries concerning U.S. tariff policy.」

「During the interim consolidated accounting period (1 April 2024 to 30 September 2024), the global economy remained in a precarious situation, including prolonged tensions in international affairs and high resource prices. In China, where the Company has business partners, the economic downturn has persisted due to stagnant real estate investment and weak personal consumption, and unstable economic factors remain.」

「During the current consolidated fiscal year, the global economy remained in an unpredictable situation, including the prolonged situation in Ukraine, rising tensions in the Middle East, prolonged high resource prices, higher prices due to the impact of yen depreciation and stagnation in the Chinese economy.」

「During the cumulative third quarter of the current consolidated fiscal year, the global economy remained in a precarious situation, including the prolonged situation in Ukraine, rising tensions in the Middle East, prolonged resource price inflation and continued inflation in major countries.」

「During the cumulative second quarter of the current consolidated fiscal year, the global economy remained in a precarious situation, including continued resource price inflation due to the impact of the situation in Ukraine, prolonged inflation in major countries and unstable exchange rates.」

「During the cumulative first quarter of the current consolidated fiscal year, the global economy remained in a precarious situation, including prolonged resource price inflation due to the impact of the situation in Ukraine, monetary tightening in major countries and sharp exchange-rate fluctuations.」

「During the consolidated fiscal year, the global economy remained in a situation requiring close attention as restrictions on economic activity were gradually eased, while the effects of higher energy costs stemming from the Ukraine conflict and prolonged automobile semiconductor shortages continued, and foreign exchange rates fluctuated sharply.」

「During the cumulative third quarter, the global economy remained in a situation requiring close attention as the impact of the Ukraine conflict persisted and foreign exchange rates fluctuated sharply. In the countries where the Company’s end users are located, the lifting of activity restrictions in Middle Eastern countries and the resulting Ramadan boom provided a tailwind for orders and shipments, but the effects of the economic slowdown associated with China’s zero-COVID policy remained significant in China.」

「During the cumulative second quarter, the global economy remained in a situation requiring close attention as the impact of the Ukraine conflict persisted and the yen depreciated rapidly amid uncertainty over the impact of the novel coronavirus disease. In the countries where the Company’s end users are located, demand recovered in Middle Eastern countries following the lifting of activity restrictions, providing a tailwind for orders and shipments, but the Company was strongly affected by the stagnation of the Chinese economy.」

「During the cumulative first quarter, the global economy remained in a highly uncertain environment due to the continuing impact of the Ukraine conflict, shortages of semiconductors and surging resource prices, amid significant fluctuations in the impact of the novel coronavirus disease.」

「During the consolidated fiscal year, the Japanese economy remained in extremely challenging conditions due to the prolonged impact of the novel coronavirus disease, higher prices for equipment and materials including packaging materials resulting from higher crude oil prices amid the Russia-Ukraine conflict, rising transportation costs and difficulties securing new personnel.」

「During the cumulative second quarter, demand grew as advanced economies recovered with the gradual easing of activity restrictions and fiscal policies by governments, and business performance, particularly in manufacturing, followed a recovery trend. However, it remained difficult to forecast the economic outlook, and conditions requiring close attention continued.」

「During the cumulative first quarter, the global economy followed a trend of moderate recovery, particularly in North America and Europe, despite restrictions on economic activity resulting from the novel coronavirus disease. This reflected progress toward normalizing economic activity through vaccination, fiscal policies by governments and monetary easing by central banks. However, it remained difficult to forecast the economic outlook, and conditions requiring close attention continued.」

「During the second quarter, the Japanese economy faced challenging conditions due to stagnant economic activity and weak personal consumption resulting from the impact of the novel coronavirus disease. The outlook was also extremely difficult to predict, with concerns about a further downside in the economy.」

「During the first quarter, the Japanese economy faced challenging conditions due to stagnant economic activity and weak personal consumption resulting from the impact of the novel coronavirus disease. The outlook was also extremely difficult to predict, with concerns about a further downside in the economy.」

「The domestic and overseas economies during the fiscal year had been expected to follow a trend of moderate recovery, but suffered significant damage and entered a tense situation due to U.S.-China trade friction, the implementation of a domestic consumption tax increase and the global spread of the novel coronavirus disease originating in China.」

「Certain sectors benefited from special demand related to the Olympics and from the excitement surrounding the Rugby World Cup. However, conditions continued to have a negative impact on the global economy, including uncertainty surrounding U.S.-China trade friction, the United Kingdom’s withdrawal from the EU, tensions arising from protests in Hong Kong and geopolitical risks in the Middle East, putting the brakes on the recent trend of moderate economic recovery.」

「Although positive factors included firm private-sector capital investment and improvements in employment and income conditions, many destabilizing factors remained, including U.S.-China trade friction, higher crude oil prices, volatility in financial and capital markets and increasing uncertainty surrounding the Chinese economy. These factors require close monitoring.」

「Although U.S.-China trade friction appears to have eased for the time being, it is unclear how the situation will develop, and the issue has merely been deferred. Its effects have gradually spread to various areas of Japan. In addition, the consumption tax increase scheduled to take effect in October this year could have a significant impact on domestic consumption, and the environment is expected to become challenging.」

「During the fiscal year, the impact of U.S.-China trade friction on the global economy was uncertain, while issues including the United Kingdom’s withdrawal from the EU and the slowdown in the Chinese economy began to weigh on the Japanese economy.」

「However, the possibility of an economic downturn has increased due to sharp fluctuations in stock prices and the impact of a stronger yen. The global economy is generally expected to remain firm. However, if U.S.-China trade friction intensifies, the global economy could deteriorate rapidly, making the outlook increasingly uncertain.」

「The global economy has remained firm, led by the United States, and is expected to continue recovering moderately. However, if U.S.-China trade friction intensifies, the global economy could deteriorate rapidly as uncertainty about the outlook increases.」

「Although a historic summit between the United States and North Korea took place in June and created a mood of reconciliation, trade friction between the United States and China has intensified, increasing uncertainty about the outlook.」

「In the textile industry surrounding the Company, particularly in materials processing, orders for industrial materials have remained firm, but the overall business environment has become challenging due to the shift of domestic production overseas and price competition with overseas products.」

「The Company believes that close attention must be paid to risks in global conditions, including a downside in the Chinese economy and conditions in North Korea and the Middle East.」

「During the cumulative second-quarter period, no new business or other risks arose. In addition, there were no significant changes to the business and other risks described in the securities report for the previous fiscal year.」

「Although overseas economies face many risks, including the uncertain implementation of policies by the Trump administration, the collapse of the Chinese economy and the North Korean issue, the overall economy, including the United States and Europe, continues to recover moderately.」

「However, as Donald Trump won the U.S. presidential election and the Chinese economy slowed due to sluggish exports and weak private investment, the impact on the domestic economy going forward has become uncertain.」

「The polarization trend continued, with the Greek crisis, the slowdown in the Chinese economy and the weaker yen on one side, while prices for fuels, raw materials and materials continued to rise, putting pressure on manufacturing costs.」

「The polarization trend continued, with the Greek crisis, the slowdown in the Chinese economy and the weaker yen on one side, while prices for fuels, raw materials and materials continued to rise, putting pressure on manufacturing costs.」

「In the textile industry surrounding the Group, particularly in materials processing, the shift of domestic production overseas and intensifying competition from Chinese companies have become increasingly severe. Domestic products are losing their price competitiveness in low-priced standard products.」