Uncertainty in the Business Environment Due to Brexit, Yen Appreciation and Slowing Overseas Economies

「Geopolitical risks, including the situations in Ukraine and the Middle East, show no sign of easing, while the cost burden resulting from supply-chain reorganization continues to increase. In Japan, higher import costs caused by the prolonged depreciation of the yen are affecting personal consumption and sentiment among small and medium-sized enterprises, and uncertainty about the outlook has not been dispelled.」

「The outlook for the economy remains uncertain due to the continued weakness of the yen, rising prices, geopolitical risks overseas and uncertainty surrounding trade policy.」

「During the six months ended 31 March 2025 (1 October 2024 to 31 March 2025), Japan's economy benefited from a recovery in domestic consumption and solid exports, while also being affected by rising prices and a tight labor market. In particular, uncertainty remains over the impact of global economic uncertainty and geopolitical risks on future economic activity.」

「The outlook remains uncertain due to the effects of the prolonged situation in Ukraine, soaring energy prices, rising prices resulting from the yen's depreciation, and financial instability caused by policy interest-rate increases in various countries, including Japan.」

「The outlook remains uncertain due to the effects of soaring energy prices caused by the prolonged situation in Ukraine, rising prices resulting from the yen's depreciation, financial instability caused by interest-rate increases by central banks, and other factors.」

「During the first quarter of the fiscal year (1 October 2022 to 31 December 2022), Japan's economy remained in a state of increasingly stagnant economic activity worldwide, as historically high inflation led many countries and regions, including Europe and the United States, to impose severe monetary tightening.」

「As the first half progressed, infections declined, and it was expected that economic activity and infection-prevention measures would be brought into balance and that the economy would recover. However, the deterioration and prolongation of the situation in Ukraine, rising prices and other global developments have kept conditions unpredictable, and uncertainty about the outlook continues. Although economic measures have been implemented, including the launch of nationwide travel support and the easing of border controls, a substantial recovery is not expected as long as China's zero-COVID policy continues, given the large share of overseas visitors from China. The global situation is therefore expected to continue having a significant impact on Japan's economy.」

「However, the deterioration and prolongation of the situation in Ukraine, rising prices and other global developments mean that conditions remain unpredictable, and uncertainty about the outlook continues.」

「In the global situation, the lockdown in Shanghai and the escalating situation in Ukraine, among other factors, have worsened the terms of trade through higher resource prices. The negative wealth effect from falling share prices is also expected to significantly constrain future personal consumption, and the absence of signs of recovery has continued.」

「During the first quarter of the fiscal year (1 October 2021 to 31 December 2021), Japan's economy appeared to be beginning to recover as vaccination progressed, the state of emergency was lifted nationwide on 1 October 2021, and restrictions on individual activities were eased. Nevertheless, an unpredictable, stop-and-start situation continued.」

「During the consolidated fiscal year, COVID-19 infections resurged in the winter, a second state of emergency was declared and subsequently lifted, and a third declaration was then issued, so uncertainty about the outlook continued. However, as of the end of September 2021, the state of emergency and priority preventive measures to prevent the spread of disease had been lifted nationwide.」

「During the nine months ended December 31, COVID-19 infections resurged in the winter and a second state of emergency was declared. Although it was lifted once, a third declaration was subsequently issued, and uncertainty about the outlook continued.」

「During the six months ended September 30, COVID-19 infections resurged in the winter and a second state of emergency was declared. Although some industries showed signs of recovery because fewer industries were subject to requests and the number of regions ultimately covered was smaller than during the first declaration, uncertainty about the outlook continued.」

「During the consolidated fiscal year, Japan's economy showed signs of recovery from the downturn caused by COVID-19 from June onward. However, the end of the pandemic was still not in sight, and concerns remained that the risk of employment adjustments and bankruptcies would increase in some industries, including services. Many employees were expected to remain unemployed or face continued declines in income, becoming a downside factor for consumption, and uncertainty about the outlook continued.」

「During the nine months ended December 31, Japan's economy remained in an uncertain situation, with economic activity at home and abroad stagnating as a result of the spread of COVID-19.」

「During the nine months ended December 31, Japan's economy continued amid expectations of growth roughly in line with the potential growth rate. Exports declined against the backdrop of slowing US and Chinese economies and an adjustment in semiconductor demand, while continued improvements in employment and income conditions and front-loaded demand ahead of the consumption tax increase were expected to support domestic demand.」

「During the first quarter of the fiscal year, Japan's economy was on a moderate recovery trend, supported by improved corporate earnings and employment conditions, but remained exposed to concerns including the US-China trade friction and the slowdown in China's economy, which reduced the ability of external demand to drive growth. Personal consumption also remained restrained amid concerns about increased burdens, including the consumption tax increase scheduled for October.」

「However, the spillover to spending, including corporate capital investment and personal consumption, has not yet been sufficient. With regard to prices, the upward pressure from rising domestic wages has been offset by the downward pressure from lower import prices, and prices have remained broadly flat.」

「However, the spillover to spending, including corporate capital investment and personal consumption, has not yet been sufficient. With regard to prices, the upward pressure from rising domestic wages has been offset by the downward pressure from lower import prices, and prices have remained broadly flat.」

「However, the spillover to spending, including corporate capital investment and personal consumption, has not yet been sufficient. With regard to prices, the upward pressure from rising domestic wages has been offset by the downward pressure from lower import prices, and prices have remained broadly flat.」

「During the six months ended September 30, corporate earnings continued to recover and employment improved, but personal consumption remained weak. The global economy, particularly in Europe, the United States and resource-rich countries, also remained uncertain, and sharp exchange-rate fluctuations continued to make the outlook for the economy uncertain.」

「During the first quarter of the fiscal year, Japan's economy remained uncertain, despite signs of recovery in corporate earnings and employment conditions following the implementation of economic and monetary policies by the current administration, as it was affected by the slowdown and instability of emerging-market economies, including China.」

「The UK's withdrawal from the EU (Brexit) has led to a sharp appreciation of the yen, significantly affecting export-related companies. In addition, yen appreciation and the slowdown in overseas economies have heightened uncertainty about the outlook, weakened household and corporate sentiment, and may cause spending on capital investment and consumption, as well as new hiring, to be postponed or cancelled.」