Uncertainty from Resource Prices, the Chinese Economy, Interest Rates and Foreign Exchange Rates

「In addition to US trade policy developments, fluctuations in energy prices and the impact on supply chains against a backdrop of prolonged tensions in the Middle East raised concerns about weakening consumer sentiment. Cautious corporate activity was also seen on some occasions, particularly in automotive-related fields, leaving the business environment uncertain.」

「As price increases continued for an extended period, they affected consumer sentiment and companies' cost burdens, and demand recovery remained slow. In addition, US trade policy developments affected corporate activity on some occasions, particularly in automotive-related fields, while companies continued to be required to secure profitability and review their cost structures, leaving the business environment uncertain.」

「During the interim consolidated accounting period (1 July 2024 to 31 December 2024), the domestic economy showed a gradual recovery trend. However, rising prices and persistently high energy prices affected consumer sentiment, and demand recovery remained limited. In addition, surging raw material prices increased the cost burden, particularly for manufacturers, making the review of earnings structures an urgent issue for many companies, and the outlook remained uncertain.」

「Overseas, the conflict between Russia and Ukraine and the Israel-Palestine conflict in the Middle East have had a major impact on the global economy. In addition, the results of the US presidential election in November are expected to have a significant impact on politics and the economy, and uncertainty about the outlook is expected to deepen further.」

「During the cumulative third quarter of the fiscal year (1 July 2023 to 31 March 2024), the economy recovered gradually, although some areas remained sluggish. However, higher prices resulting from increases in raw material and energy prices caused by yen depreciation and high resource prices, among other factors, increased uncertainty regarding personal consumption and corporate earnings, and the outlook remained uncertain.」

「During the cumulative second quarter of the fiscal year (1 July 2023 to 31 December 2023), the economy recovered gradually, although some areas remained sluggish. However, higher prices resulting from increases in raw material and energy prices caused by yen depreciation and high resource prices, among other factors, increased uncertainty regarding personal consumption and corporate earnings, and the outlook remained uncertain.」

「During the cumulative first quarter of the fiscal year (1 July 2023 to 30 September 2023), the economy was expected to recover gradually. However, higher prices resulting from increases in raw material and energy prices caused by yen depreciation and high resource prices, among other factors, increased uncertainty regarding personal consumption and corporate earnings, and the outlook remained uncertain.」

「Overseas, the effects of Russia's invasion of Ukraine, which has had a major impact on the global economy, and global inflation are expected to persist, further deepening uncertainty about the outlook.」

「During the cumulative second quarter of the fiscal year (1 July 2022 to 31 December 2022), the economy showed signs of recovery in Japan as restrictions on activities were relaxed, but resource prices and yen depreciation caused prices to rise. Globally, raw material and energy prices were expected to rise further, and the outlook remained uncertain due to concerns about prolonged inflation.」

「During the cumulative first quarter of the fiscal year (1 July 2022 to 30 September 2022), the impact of COVID-19 in Japan was beginning to ease as restrictions on activities were relaxed. However, raw material and energy prices rose due to the situation involving Russia and Ukraine, while the yen depreciated sharply, creating an uncertain outlook amid signs of inflation.」

「During the cumulative third quarter of the fiscal year (1 July 2021 to 31 March 2022), although priority preventive measures had been lifted in Japan, the impact of COVID-19 continued. Overseas, Russia's invasion of Ukraine drove up resource prices, and the global economy was expected to stagnate, making conditions in Japan and overseas more uncertain than before.」

「During the cumulative second quarter of the fiscal year (1 July 2021 to 31 December 2021), the economy was gradually recovering after the state of emergency was lifted at the end of September, and the number of infections also gradually declined. However, after the Omicron variant was reported in South Africa in November, infections began to rise again in countries around the world, leaving the outlook uncertain again at the end of the second quarter.」

「During the cumulative first quarter of the fiscal year (1 July 2021 to 30 September 2021), severe conditions continued in Japan and overseas due to the COVID-19 pandemic. In Japan, damage spread across many industries as priority preventive measures and a state of emergency were issued. Although vaccination progressed and the number of infections gradually declined after peaking in August, uncertainty about the outlook continued.」

「During the fiscal year (1 July 2020 to 30 June 2021), severe conditions continued in Japan and overseas due to the COVID-19 pandemic. In Japan, the spread of the third and fourth waves led to repeated declarations of a state of emergency in major metropolitan areas, and damage spread across many industries. Overseas, economic activity began to recover in developed countries where vaccination was progressing, while many countries continued to experience an increase in infections, including the spread of variant viruses, and uncertainty about the outlook continued.」

「During the cumulative third quarter of the fiscal year (1 July 2020 to 31 March 2021), severe conditions continued in Japan and overseas due to the COVID-19 pandemic. In Japan, temporary improvement was seen as a result of the government's economic stimulus measures, but the spread of the third wave of infections led to the reissuance of a state of emergency and damage spread across many industries. Overseas, economic activity began to recover in developed countries where vaccination was progressing, while many countries continued to experience an increase in infections, including the spread of variant viruses, and uncertainty about the outlook continued.」

「During the cumulative second quarter of the fiscal year (1 July 2020 to 31 December 2020), the operating environment remained uncertain in Japan and overseas due to the COVID-19 pandemic. In Japan, temporary improvement was seen as a result of the government's economic stimulus measures, but a sharp increase in infections caused damage to spread across many industries. Overseas, stock prices rose, particularly for high-tech stocks, but infections continued to spread worldwide and severe conditions persisted.」

「During the cumulative first quarter of the fiscal year (1 July 2020 to 30 September 2020), the operating environment improved from the previous quarter as domestic economic activity resumed following the lifting of the state of emergency issued in response to the spread of the novel coronavirus. However, infections continued to spread, particularly in Europe and the United States, and uncertainty about the economic outlook continued due to concerns about a renewed spread of infections in Japan.」

「During the cumulative third quarter of the fiscal year (1 July 2019 to 31 March 2020), concerns about the outlook had begun to emerge due to the impact of US-China trade friction, a major typhoon and the consumption tax increase when, in early 2020, the global spread of the novel coronavirus (pandemic) occurred, creating a situation in which a major economic blow was unavoidable.」

「During the cumulative second quarter of the fiscal year (1 July 2019 to 31 December 2019), Japan's economy continued to show improvement in employment and income conditions, and domestic demand such as personal consumption and capital investment remained firm. However, weakness emerged mainly in manufacturing due to sluggish exports resulting from US-China trade friction and production stoppages caused by a major typhoon, and uncertainty about the outlook continued.」

「During the cumulative first quarter of the fiscal year (1 July 2019 to 30 September 2019), Japan's economy continued to show improvement in employment and income conditions, and domestic demand such as personal consumption and capital investment remained firm. However, uncertainty about the outlook continued worldwide due in part to the expanding impact of US-China trade friction.」

「Regarding Japan's economy overall, the Cabinet Office issued the following outlook in July 2019: "Looking ahead, although weakness is expected to remain for the time being, a gradual recovery is expected to continue as employment and income conditions continue to improve, supported also by the effects of various policies. However, closer attention must be paid to the impact of developments in trade issues on the global economy, while consideration must also be given to the outlook for the Chinese economy, uncertainty surrounding overseas economies and policies, and the impact of fluctuations in financial and capital markets."」

「During the cumulative third quarter of the fiscal year (1 July 2018 to 31 March 2019), the operating environment was relatively solid in the first half, supported by the strong US economy and domestic demand centered on capital investment, despite a series of natural disasters in Japan. In the second half, however, uncertainty about the outlook increased due to intensifying US-China trade friction and unstable political conditions in the United States and major European countries.」

「During the cumulative second quarter of the fiscal year (1 July 2018 to 31 December 2018), the operating environment was relatively solid in the first half, supported by the strong US economy and domestic demand centered on capital investment, despite a series of natural disasters in Japan. In the second half, however, uncertainty about the outlook increased due to intensifying US-China trade friction and unstable political conditions in the United States and major European countries.」

「During the cumulative first quarter of the fiscal year (1 July 2018 to 30 September 2018), although there were risk factors such as US-China trade friction overseas and repeated natural disasters in Japan, the operating environment continued to improve, supported by the strong US economy and domestic demand centered on capital investment.」

「During the fiscal year (1 July 2017 to 30 June 2018), although uncertainty overseas continued, including concerns over the US Trump administration's shift toward protectionism and the resulting trade friction, Japan's domestic economy continued to recover gradually, driven mainly by domestic demand such as corporate capital investment supported by solid earnings and personal consumption, and the operating environment continued to improve.」

「During the cumulative third quarter of the fiscal year (1 July 2017 to 31 March 2018), although uncertainty overseas continued, the economy continued to recover gradually, driven mainly by domestic demand such as corporate capital investment and personal consumption, and the operating environment continued to improve.」

「During the cumulative second quarter of the fiscal year (1 July 2017 to 31 December 2017), although uncertainty overseas continued, the economy continued to recover on the strength of domestic demand centered on personal consumption and corporate capital investment, and the operating environment continued to improve.」

「During the cumulative first quarter of the fiscal year (1 July 2017 to 30 September 2017), although uncertainty overseas continued, the economy continued to recover on the strength of domestic demand centered on personal consumption and capital investment, and the operating environment continued to improve.」

「As reported in the results of a March 2017 Cabinet Office survey, Japan's economy during the cumulative third quarter of the fiscal year was in a situation where positive and negative factors intersected: "Although the recovery has continued, there are still signs of a pause. Looking ahead, while expectations for orders and other factors remain, there are also concerns about labor shortages and rising costs." This was compounded by concerns over the policy implementation capability of the US Trump administration and political conditions in East Asia, resulting in an overall uncertain outlook.」

「During the cumulative second quarter of the fiscal year, Japan's economy showed signs of recovery as the performance of manufacturing companies, which drive the economy, was supported by a recovery in industrial production and exports. Against this backdrop, following the results of the US presidential election in November, the so-called Trump effect triggered a swing back toward yen depreciation, and the economy was beginning to move out of its previous range-bound trend. However, the Trump effect has both positive and negative aspects, and the outlook for its ability to boost the economy remains uncertain.」

「Although the information services industry to which our company belongs continued to face a shortage of IT personnel, expectations for new fields such as IoT, big data, AI and FinTech also increased, and the market continued to perform solidly.」

「Although uncertainty increased in the second half of the fiscal year due to sluggish prices for crude oil and other resources, a slowdown in the Chinese economy, interest rate hikes in the United States and the trend toward a stronger yen, corporate earnings generally remained solid, and capital investment showed a gradual upward trend.」