Yen Appreciation and Uncertainty Over the Global Economic Outlook

「During the interim accounting period, Japan's economy remained in a situation where concerns about an economic slowdown persisted, including due to currency-market fluctuations and rising prices resulting from higher costs, despite firm corporate earnings.」

「However, downside risks to the economy, including the impact of U.S. trade policy and energy issues arising from conditions in the Middle East, persisted over an extended period, and the outlook remained uncertain.」

「今後の見通しにつきましては、イラン情勢の緊迫化などによる資源の供給リスクや価格高騰などの懸念材料が多く、予断を許さない状況が続くものと思われます。」

「At the same time, the outlook remained uncertain due to the impact of unstable international conditions, including downward pressure on manufacturing-sector earnings, particularly among export-related companies, resulting from U.S. trade policy.」

「However, the outlook remained uncertain due to soaring prices, including those of raw materials and fuel, as well as increasing uncertainty surrounding U.S. trade policy.」

「At the same time, sufficient attention must be paid to the outlook, including the impact of persistently high raw-material prices on inflation and fluctuations in the financial and capital markets.」

「During the cumulative third quarter period, Japan’s economy gradually recovered as employment conditions improved and personal consumption showed signs of recovery. However, the outlook remained uncertain as unstable international conditions and yen depreciation became entrenched and high prices persisted.」

「During the cumulative second quarter period, Japan’s economy remained on a recovery trend as economic activity normalized. However, the outlook was expected to remain uncertain due to downside risks to the domestic economy, including unstable global conditions, rapid yen depreciation and persistently high resource and energy prices.」

「At the same time, the economic outlook was expected to remain uncertain due to soaring raw-material prices and transportation costs, as well as foreign-exchange fluctuations.」

「During the fiscal year, Japan’s economy showed signs of recovery and economic activity normalized. However, the outlook remained uncertain due to soaring energy and raw-material costs resulting from the situation in Ukraine and price increases caused by yen depreciation.」

「During the cumulative third quarter period, Japan’s economy showed signs of a gradual recovery in economic activity as various restrictions on activity were eased despite the impact of the novel viral infection. However, the difficult business environment continued due to soaring raw-material and energy prices and broad-based price increases.」

「During the cumulative second quarter period, Japan’s economy showed signs of a gradual recovery as economic and social activity normalized. However, the outlook remained uncertain due to soaring raw-material and energy prices resulting from Russia’s invasion of Ukraine and rising prices associated with the sharp depreciation of the yen.」

「At the same time, the domestic economic outlook remained uncertain as sharp yen depreciation caused foreign-exchange volatility and geopolitical risks surrounding the situation in Ukraine increased, driving up energy and raw-material prices. In the manufacturing sector to which the Company belongs, soaring raw-material prices and procurement difficulties also had a serious impact.」

「In addition, the difficult business environment continued due to rising energy prices, particularly crude oil prices, and increasingly severe shortages of parts and raw materials.」

「However, the outlook remained uncertain due to shortages of raw materials, disruptions to supply chains and soaring transportation costs.」

「At the same time, concerns arose over the impact on corporate earnings of shortages of semiconductor materials and soaring raw-material prices, and the outlook remained uncertain.」

「During the cumulative first quarter period, Japan’s economy remained in difficult conditions due to the resurgence of the novel viral infection. Although some recovery in economic activity was seen in the manufacturing sector and expectations for an economic recovery increased, the outlook remained uncertain.」

「During the fiscal year, Japan’s economy faced severe conditions as economic activity stagnated under the impact of the spread of the novel coronavirus infection originating in Wuhan, Hubei Province, China, while corporate earnings deteriorated and personal consumption remained sluggish following the issuance of the state of emergency on two occasions.」

「During the cumulative third quarter period, Japan’s economy deteriorated rapidly as economic activity was restricted by the impact of the novel viral infection originating in Wuhan, China. Although economic activity gradually resumed after the lifting of the state of emergency, the outlook remained uncertain due to the impact of the global resurgence of the infectious disease.」

「During the cumulative second quarter period, Japan’s economy entered a phase of rapid deterioration as the spread of the novel viral infection originating in Wuhan, China, caused economic activity to stagnate worldwide. After the lifting of the state of emergency, efforts to resume economic activity broadened and expectations for an improved business environment increased, but the recovery remained gradual and the outlook continued to be uncertain.」

「During the cumulative first quarter, Japan's economy was severely constrained in terms of corporate and economic activity by the global spread of the novel viral disease originating in Wuhan, further intensifying concerns over an economic slowdown. With no clear prospect of containing the outbreak and a serious impact on manufacturing, the outlook for the pyrotechnics industry also became uncertain and difficult conditions continued.」

「From the beginning of the year, economic activity was severely restricted by the spread of the novel coronavirus that originated in Wuhan, Hubei Province, China, and the economy slowed sharply.」

「During the cumulative third quarter, Japan's economy continued on a moderate recovery path, with employment and income conditions improving. However, in addition to prolonged US-China trade friction, the decline in demand following the consumption-tax increase in October and natural disasters became factors slowing the economy.」

「During the cumulative second quarter, Japan's economy continued on a moderate recovery path, with employment and corporate earnings improving. However, manufacturing faced numerous concerns amid the slowdown in overseas economies, capital investment became more cautious and uncertainty over the outlook intensified.」

「During the cumulative first quarter, Japan's economy continued to recover moderately, supported by improvements in employment and income conditions accompanying solid corporate performance. However, higher logistics and raw-material costs and a slowdown in the Chinese economy against the backdrop of US-China trade friction caused exports to stagnate, raising concerns over an economic downturn resulting from the deteriorating trend in manufacturing.」

「Looking overseas, the trade war between the US Trump administration and China over the trade balance has become more complex as tariff issues have become involved. For Japan, which depends heavily on exports to the US, this is not a distant issue and could become a factor that undermines the global economy.」

「During the cumulative third quarter, the driving force of external demand showed a weakening trend against the backdrop of prolonged US-China trade friction and the resulting slowdown in the Chinese economy. However, as the business cycle remained strong, companies turned their attention not only to capital investment but also to investment in people, including higher wages and employment, as earnings recovered on higher sales. Whether this investment will translate into increased personal consumption remains an issue for the future.」

「During the cumulative second quarter, Japan's economy maintained strong sales, particularly in domestic manufacturing, as the business cycle remained stable. However, trade friction has arisen among countries due to the trade policies of the US Trump administration, and growing US protectionism, particularly over the trade balance with China, could affect Japan's trade balance.」

「During the cumulative first quarter, Japan's economy continued to recover moderately, supported by improving corporate earnings, increased investment and better employment conditions. However, uncertainty remains over whether higher prices for crude oil imported from the Middle East due to US economic sanctions against Iran will affect domestic consumption going forward.」

「Internationally, the year was marked by the disruption caused by US protectionism over the trade balance.」

「During the cumulative third quarter, Japan's economy maintained generally strong conditions worldwide. However, countries were affected by protectionist moves by the new US administration. Domestically, Japan's low production efficiency compared with other advanced economies has been highlighted, creating a need for more efficient and labor-saving operations and work-style reform through the use of AI.」

「Internationally, countries have failed to align their interests over various economic partnership agreements, including the TPP, creating a situation that could undermine Japan's trade balance.」

「Economic policies and other measures following the inauguration of the new US president have affected economic agreements among countries, increasing uncertainty over how they will affect the Japanese economy going forward.」

「During the cumulative third quarter, Japan's economy remained uncertain. Although conditions relating to employment and income improved, corporate earnings showed signs of weakening due to yen appreciation and slower growth in emerging-market economies. Overseas, concerns increased over the UK's EU withdrawal issue and the policies of the next US president.」

「During the cumulative second quarter, Japan's economy was affected by increased uncertainty over the outlook for the European economy due to the UK's EU withdrawal issue. Domestically, the strong yen has squeezed the earnings of export companies, particularly manufacturers, becoming a drag on the economic recovery.」

「Following the UK's decision to leave the European Union (EU), uncertainty over the outlook for foreign exchange markets and the global economy has intensified. Investors have been buying the yen as a stable currency, resulting in a trend toward yen appreciation and creating a situation that could affect earnings, particularly at export-related companies.」