Political, Economic and Regulatory Changes Affecting Overseas Business

「In the global economy, the impact of additional tariffs following the shift in U.S. trade policy weighed on the performance of export companies, particularly those related to automobiles, while foreign exchange markets also experienced substantial volatility. In addition, escalating tensions in the Middle East led to unstable energy supplies and surging crude oil prices, further driving up domestic raw material prices and logistics costs. Tensions in Japan-China relations have also continued, leaving the outlook persistently uncertain.」

「On the external-demand side, the impact of US tariff policies became apparent and exports of goods weakened. While high interest rates were maintained globally, the Bank of Japan was cautious about additional rate hikes, leading to yen depreciation because of the Japan-US interest-rate differential. This supported strong performance among exporters, but domestic-demand businesses saw weaker performance because of higher costs and labor shortages, resulting in a divergence in performance and continued concern about the outlook.」

「The impact of US tariff policies is expected to be significant, particularly for automakers and companies in related businesses, and the outlook for the global economy is expected to remain uncertain.」

「Meanwhile, although economic growth is being supported by easing inflation and lower interest rates in the global economy, downside risks are causing concern because of fears that supply disruptions caused by climate conditions and geopolitical tensions could become commonplace.」

「Meanwhile, the situation continues to require close monitoring of geopolitical risks, economic slowdowns in major overseas countries and the impact of higher long-term interest rates associated with monetary policy in the United States and Europe.」

「Meanwhile, uncertainty about the outlook for the global economy continues because of higher interest rates resulting from monetary tightening in various countries, geopolitical risks arising from the situations in Ukraine and the Middle East, and supply constraints across various supply chains.」

「However, the situation continues to require close monitoring of price trends, developments in the international financial and capital markets, and the impact of the prolonged Ukraine conflict on food and resource prices.」

「However, the impact of global inflation, monetary-tightening policies in various countries, exchange-rate movements and geopolitical risks on prices and supply chains in Japan remains an area requiring close monitoring.」

「During the second quarter (1 April 2022 to 30 September 2022), record inflation in the United States and Europe prompted central banks to tighten monetary policy, heightening concerns about an economic recession. In Japan, although the number of new COVID-19 cases per day rose sharply in August, personal consumption, including spending on services, remained firm and the economy continued to recover, partly because the number of severe cases remained low. Although risks remain, including a contraction in other domestic consumption as food and energy prices continue to rise amid a weaker yen and higher resource prices, the economy is expected to continue its gradual recovery, supported by planned policies to stimulate tourism demand and substantially ease border controls.」

「During the first quarter (1 April 2022 to 30 June 2022), the global economy showed a gradual recovery despite the impact of higher global resource prices caused by heightened geopolitical tensions and interest-rate increases by major countries. Consumption expanded as living with COVID-19 became established, and capital investment in anticipation of the post-COVID period remained firm. In Japan, personal consumption also recovered as people resumed travel and other activities, and signs of an economic recovery emerged. However, uncertainty about the outlook is expected to continue because of concerns about rising prices resulting from the rapid depreciation of the yen and supply-chain disruptions.」

「However, the situation remains uncertain, with signs of rising prices due to global conditions, including Russia's invasion of Ukraine, and a possible renewed spread of infections.」

「In Asia and Oceania, the spread of the Delta variant, which began in India and Indonesia, extended across Asia, including Japan, increasing the number of expatriates and their family members returning to Japan. Revenue also increased from PCR testing procedures for Japanese nationals returning home in Southeast Asian countries. However, the return of expatriates and their families led to a sharp decline in medical-facility users, resulting in revenue of ¥218 million, down 5.4% year on year. Operating profit was ¥24 million, down 77.1% year on year, as sales activities were strengthened in anticipation of the post-COVID recovery.」

「In the Americas and Europe, restrictions on activity related to COVID-19 were imposed in various locations, reducing card spending. Revenue was ¥762 million, down 41.7% year on year, while operating profit was ¥200 million, down 45.4%.」

「In the Americas and Europe, service usage declined in some areas because of conditions in the United States, resulting in revenue of ¥2,502 million, down 3.5% from the previous fiscal year.」

「In Asia and Oceania, service usage declined in some areas because of conditions in China, Hong Kong and South Korea. However, stable service delivery in Southeast Asia resulted in revenue of ¥618 million, up 6.3% year on year.」

「During the second quarter (1 April 2019 to 30 September 2019), the economic environment surrounding our Group suggested a deterioration in the trade environment, amid growing uncertainty about the outlook for the global economy due to escalating trade friction.」

「During the first quarter (1 April 2019 to 30 June 2019), the economic environment surrounding our Group raised concerns about the impact on Asian countries of escalating trade friction between the United States and China and the slowdown in the Chinese economy.」

「In Asia and Oceania, service usage declined in some areas because of conditions in individual countries, resulting in revenue of ¥788 million, down 9.5% from the previous fiscal year.」

「In Asia and Oceania, service usage declined in some areas because of conditions in individual countries. Revenue was ¥581 million, down 18.2% year on year. Operating profit was ¥302 million, down 13.0% year on year, as the impact of upfront investments, including the expansion of overseas bases, continued.」

「In Asia and Oceania, revenue was ¥395 million, down 16.7% year on year, due to the impact of changes in conditions in East Asia and other factors. Operating profit was ¥203 million, down 19.8% year on year, partly because of increased staffing at overseas bases.」

「The global economic environment surrounding our Group during the consolidated fiscal year was on a gradual recovery trend, despite risk factors such as the United States' protectionist trade policies. In Asia and Oceania, service usage declined in some areas because of conditions in individual countries, resulting in revenue of ¥870 million, down 13.4% from the previous fiscal year.」

「In Asia and Oceania, service usage declined in some areas because of conditions in individual countries. Revenue was ¥711 million, down 8.1% year on year. Operating profit was ¥347 million, down 20.7% year on year, as the impact of upfront investments, including the expansion of overseas bases, continued.」

「During the second quarter (1 April 2017 to 30 September 2017), the economic environment surrounding our Group saw more frequent instances in which global political issues affected markets.」

「Overseas business operations entail several inherent risks, including: • unexpected changes to or tightening of laws and regulations; • unfavorable political or economic factors; • changes in tax systems or tax rates; and • social disruption caused by terrorism, war or other factors.」

「Overseas business operations entail several inherent risks, including: • unexpected changes to or tightening of laws and regulations; • unfavorable political or economic factors; • changes in tax systems or tax rates; and • social disruption caused by terrorism, war or other factors.」