Fluctuations in Economic Conditions in Japan, North America and Asia

「During the consolidated fiscal year, the global economy generally remained on a path of moderate recovery as inflation slowed in major economies and the impact of monetary tightening gradually eased.」

「During the interim consolidated fiscal period, the global economy generally remained on a path of moderate recovery, although the outlook was clouded by factors including the backlash from front-loaded demand associated with higher tariff rates. In the United States, uncertainty over trade policy persisted and growth slowed slightly, but private consumption and capital investment remained firm. In China and other emerging Asian economies, adjustments in the property market and local government fiscal burdens were headwinds, while government stimulus measures and increased investment in AI and digital fields provided support.」

「During the interim consolidated fiscal period, the outlook for the global economy remained uncertain due to globally rising service prices and weakness in China's property market.」

「During the consolidated fiscal year, wages and private consumption increased, but the global recovery trend weakened and the outlook remained uncertain as deteriorating conditions in Ukraine and the Middle East disrupted logistics networks and drove up prices, including those of energy resources.」

「During the third quarter of the fiscal year, the global recovery trend weakened and the outlook remained uncertain. In the United States, private consumption increased as employment conditions improved. In China, the property market stagnated, while in Europe manufacturing and construction activity weakened under the impact of higher interest rates. In Japan, although residential and capital investment declined, private consumption recovered as a result of lower crude oil prices and increases in the number of employed people and wages, and the economy recovered moderately.」

「During the second quarter of the fiscal year, the outlook remained uncertain. In the United States, private consumption and capital investment increased, while China's property market remained weak and Europe's manufacturing sector stagnated under the impact of shortages of materials and equipment. In Japan, the economy recovered moderately, aided by the price-suppression effects of gasoline price relief measures and measures to reduce the burden of electricity and city gas charges in response to higher prices.」

「During the first quarter of the fiscal year, economic growth slowed due to prolonged monetary tightening aimed at containing inflation, particularly in developed economies. In Japan, however, the economy remained resilient as normalization accelerated following the reclassification of COVID-19 under the Infectious Diseases Control Law. Nevertheless, the outlook remained uncertain, as slowing overseas economies associated with prolonged inflation posed a downside risk to the economy.」

「During the third quarter of the fiscal year, global inflation caused by multiple factors, including COVID-19 and Russia's invasion of Ukraine, slowed economic growth.」

「During the second quarter of the fiscal year, economic growth continued as many countries moved toward living with COVID-19. However, the outlook remained uncertain, as the growth pace slowed due to tighter activity restrictions accompanying renewed infections, Russia's invasion of Ukraine and higher resource prices.」

「During the first quarter of the fiscal year, economic recovery continued as many countries increasingly eased activity restrictions on the assumption of living with COVID-19. However, the outlook remained uncertain, as the recovery slowed due to worsening conditions in Ukraine, supply chain disruptions and higher resource prices stemming from China's zero-COVID policy.」

「During the consolidated fiscal year, the global economy was recovering against a backdrop of easing activity restrictions as COVID-19 vaccinations progressed, but the outlook remained uncertain due to various concerns, including inflation driven by a sharp expansion in demand and higher resource prices, rising transportation costs amid logistics disruptions, and Russia's invasion of Ukraine.」

「During the third quarter of the fiscal year, the global economy was recovering against a backdrop of easing activity restrictions as COVID-19 vaccines became more widely available and treatments were developed. However, uncertainty remained high, with new variants being identified. In the United States, the recovery slowed as renewed infections in some regions led to activity restrictions and sluggish private consumption. In Europe, conditions remained difficult as new infections surged again and lockdowns were imposed in some countries. In China, the economic recovery slowed as renewed infections in some cities led to stringent activity restrictions.」

「During the second quarter of the fiscal year, restrictions on activity were eased as COVID-19 vaccines became more widely available and treatments were developed, but the outlook remained uncertain due to concerns including the renewed spread of infections caused by variants and semiconductor shortages. In the United States, private consumption recovered as restrictions were eased alongside vaccine rollout, and the economy remained firm. In Europe, although conditions remained difficult, private consumption and other areas showed signs of recovery as restrictions were eased gradually. In China, although growth was slowing under the impact of US-China trade tensions and US monetary policy, the economic recovery continued, driven by firm domestic demand. In Japan, the economy was gradually recovering as restrictions were eased alongside progress in vaccinations and as overseas economies recovered.」

「During the first quarter of the fiscal year, the global economy remained difficult, with economic activity stagnating and private consumption sluggish due to the spread of COVID-19, but gradually showed signs of recovery against a backdrop of vaccine development and rollout. However, some regions saw signs of renewed infections, and uncertainty remained high.」

「During the third quarter of the fiscal year, the global economy remained difficult due to the impact of COVID-19, but continued to show signs of recovery, following the second quarter. In the United States, the economic recovery continued, supported by increased private consumption and capital investment. In Europe, manufacturing production and capital investment showed signs of recovery, but economic activity was constrained by the resurgence of COVID-19, resulting in a weak economic recovery. In China, the economy was recovering as exports and capital investment increased, supported by economic measures aimed at normalizing economic activity and growing global demand for information and communications equipment. In Japan, although private consumption remained low due to calls for people to refrain from going out, the economy showed signs of recovery, particularly in the automotive and production machinery manufacturing sectors, as demand recovered in Japan and overseas.」

「During the second quarter of the fiscal year, the global economy remained difficult due to the impact of COVID-19, but showed signs of recovery and a gradual improvement as economic activity gradually resumed.」

「During the first quarter of the fiscal year, the global economy was a downside factor for economic activity as the spread of COVID-19 constrained economic activity. In the United States, signs of a recovery, particularly in private consumption, emerged as economic activity gradually resumed, but economic conditions remained extremely difficult. In Europe, private consumption, exports and other areas declined sharply, and conditions remained extremely difficult, although the economy showed signs of bottoming out. In China, the recovery continued, with corporate production recovering to levels exceeding those of the same month of the previous year. In Japan, signs of a recovery in private consumption and other areas emerged, but exports and corporate production continued to decline, and the economy continued to slow.」

「Toward the end of the consolidated fiscal year, economic activity was constrained by the global spread of COVID-19, becoming a downside factor for the economy.」

「In China, various policies have been implemented in response to the economic slowdown, but exports have declined under the impact of US-China trade tensions, and the economy is slowing moderately. In Japan, exports, particularly to the United States, remain weak, but the economy continues to recover moderately, supported by increased capital investment and other factors.」

「In China, the economy slowed moderately due to weak external demand caused by trade issues with the United States, the impact of measures to restrain investment and sluggish domestic demand, including lower imports. In Japan, the economy recovered moderately due to a recovery in personal consumption, despite continued sluggish exports.」

「In China, investment in railway construction and production of information and communications equipment expanded due to the government's measures to stimulate domestic demand, but the economic recovery slowed as exports declined following increases in U.S. tariffs.」

「In China, capital investment declined and the economy slowed due to uncertainty over the outlook associated with the U.S.-China trade friction. In Japan, personal consumption showed signs of recovery against a backdrop of improving employment and income conditions and the effects of various policies, but attention remained necessary because overseas economic uncertainty associated with the U.S.-China trade friction and other factors could weigh on the outlook.」

「During the six-month period ended [the relevant date], the global economy continued to recover steadily in the United States, despite concerns over policy developments and trade issues, as personal consumption increased against a favorable employment and income backdrop and income-tax cuts, while government spending increased due to tax reform and higher spending caps. Europe maintained a moderate recovery, with machinery and equipment investment increasing and personal consumption remaining firm. In China, the economy showed signs of recovery as consumption remained firm against a backdrop of steadily rising personal income, despite concerns over the U.S.-China trade friction. In Japan, personal consumption showed signs of recovery against a backdrop of improving employment and income conditions, while capital investment increased, particularly in rationalization and labor-saving investments prompted by labor shortages, and a moderate recovery continued.」

「During the nine-month period ended [the relevant date], the global economy continued to recover steadily in the United States, as employment conditions continued to improve and personal consumption and capital investment remained firm. Europe recovered moderately as orders in manufacturing increased. In Asia, China's economy remained resilient despite slower growth in fixed-asset investment, while Japan continued to recover moderately as capital investment and industrial production increased gradually and exports of electronic components to Asia, particularly China, continued to rise.」

「During the six-month period ended [the relevant date], the global economy continued to recover steadily in the United States, as capital investment increased gradually and personal consumption also showed signs of recovery. Europe recovered moderately as personal consumption increased and exports showed signs of recovery. In Asia, China's economy was expected to continue recovering, supported by firm growth in personal consumption and expanding exports. Japan continued to recover moderately, with personal consumption and capital investment showing strong growth and exports showing signs of recovery.」

「During the three-month period ended [the relevant date], the global economy continued to recover steadily in the United States, as employment conditions continued to improve and personal consumption also showed signs of recovery. Europe recovered moderately, with signs of improvement in capital investment and manufacturing. In Asia, China's economy was expected to continue showing signs of recovery, including expanded infrastructure and real-estate investment, supported by the effects of various policies. Japan also continued to recover moderately, supported by improvements in personal consumption and a recovery in exports.」

「Our Group operates in Japan and Asia. Accordingly, changes in the economic conditions of the countries and regions where our Group manufactures and sells products may affect our Group's financial position, operating results and cash flows.」

「During the nine-month period ended [the relevant date], the global economy continued to recover in the United States, where exports and capital investment gradually recovered as the decline in crude-oil prices came to a halt. Europe maintained a moderate growth pace, supported by firm personal consumption against a favorable employment and income backdrop. In Asia, China's economy showed signs of recovery due to expanded housing sales and public-sector investment, while Japan maintained its recovery as exports, including those to the United States and China, and construction-related capital investment increased.」

「During the six-month period ended [the relevant date], the global economy continued to recover in the United States, as the decline in crude-oil prices and the appreciation of the dollar began to level off. Europe maintained a recovery trend, although companies remained cautious about hiring and wage increases. In Asia, China's economy continued to slow, mainly in fixed-asset investment, while Japan's economy gradually recovered, supported by stronger-than-expected public and residential investment.」

「Our Group operates in Japan, North America and Asia. Accordingly, changes in the economic conditions of the countries and regions where our Group manufactures and sells products may affect our Group's financial position, operating results and cash flows.」