Economic uncertainty due to yen depreciation, rising prices and geopolitical conditions

「In the information services industry to which the Group belongs, demand for IT investment aimed at improving business efficiency and strengthening competitiveness remained firm. Across all industries, initiatives to use AI, promote digital transformation and introduce and utilize cloud services progressed.」

「Japan's economy maintained a moderate recovery trend during the interim consolidated accounting period, supported by a recovery in personal consumption against a backdrop of inbound demand and wage increases. Meanwhile, the high level of cost burdens caused by rising energy prices, labor costs and logistics costs continues, and many downside factors remain, including intensifying geopolitical risks, U.S. trade policy and political developments in Japan. The outlook is therefore expected to remain uncertain.」

「Many downside factors remain, including soaring raw material and labor costs, labor shortages, intensifying geopolitical risks and slower global economic growth, and the outlook is expected to remain uncertain.」

「During the first 9 months of the fiscal year under review, Japan's economy continued on a moderate recovery trend, with personal consumption of in-person services increasing steadily, inbound demand recovering and corporate capital investment expanding. Meanwhile, the outlook remains uncertain due to the effects of inflation, supply constraints caused by labor shortages, worsening conditions in the Middle East and downside pressure from a slowdown in overseas economies.」

「During the first half of the fiscal year under review, Japan's economy entered its first summer holiday season since COVID-19 was reclassified as a Class 5 disease. Although the movement of people and goods was disrupted in some areas by damage to transport infrastructure caused by typhoons and heavy rain, consumption driven by inbound demand and personal consumption of in-person services continued to increase steadily, maintaining a moderate recovery trend. Meanwhile, the outlook remains uncertain due to a stronger tendency toward frugality caused by high prices for various goods, persistently high raw material and energy prices, and downside pressure from a slowdown in overseas economies.」

「During the first quarter of the fiscal year under review, Japan's economy entered a recovery trend, supported by the normalization of economic activity toward the post-COVID period and the expansion of personal consumption centered on inbound demand, as border-control measures for people entering Japan were lifted and COVID-19 was reclassified as a Class 5 disease under the Infectious Diseases Control Law. Meanwhile, the outlook remains uncertain, as the economy continues to face prolonged labor shortages and high prices for various goods and energy.」

「Meanwhile, soaring raw material and fuel costs, inflationary pressure in the global economy and uncertainty over the future course of the Ukraine situation are risk factors, and the outlook remains uncertain.」

「Meanwhile, soaring raw material and fuel costs, a growing sense of labor shortages, stronger inflationary pressure in the global economy and the effects of monetary tightening are also risk factors. Although comprehensive economic measures are expected, the outlook remains uncertain.」

「Meanwhile, in addition to inflation affected by the rapid depreciation of the yen and higher raw material prices, the prolonged Russia-Ukraine situation and a slowdown in the global economy caused by global monetary tightening pose downside risks to the domestic economy. Although revenge spending and inbound demand are expected, the outlook remains uncertain.」

「During the first quarter of the fiscal year under review, Japan's economy was expected to normalize as strict restrictions on movement and border-control measures related to COVID-19 were eased. However, the recovery in corporate capital investment and personal consumption remained limited, partly because of inflation affected by the rapid depreciation of the yen and higher raw material prices. In addition, although fourth doses of COVID-19 vaccines were being administered following the sharp increase in infections from July and the arrival of the seventh wave, concerns remained about the impact on economic activity. Meanwhile, the global economy remained uncertain, hit by high inflation resulting from energy shortages in Western countries advancing decoupling from Russia following Russia's invasion of Ukraine.」