Uncertainty From Overseas Economies, Foreign Exchange, Crude Oil Prices and Geopolitical Risk

「In particular, delays in procuring raw and fuel materials and shortages in available supplies caused by the emergence of geopolitical risks have become a tangible threat, and we recognize the need to monitor market conditions even more closely.」

「However, the outlook for the economy remains uncertain as additional US tariffs and continued inflation are squeezing real incomes and restraining the strength of private consumption.」

「During the interim accounting period (1 April 2024 to 30 September 2024), the Japanese economy showed a gradual recovery amid improvements in employment and income conditions and expanding inbound demand. However, the outlook remained uncertain because volatility in financial and capital markets, persistently high fuel and raw material prices, yen depreciation, high interest rates in Europe and the United States, and stagnation in China's property market pose downside risks to overseas economies and could weigh on economic activity.」

「Although economic activity normalized and inbound demand showed signs of recovery, the outlook remained uncertain and the business environment challenging due to yen depreciation, persistently high resource and raw material prices, heightened global tensions, inflation-control measures in various countries, and a slowdown in the Chinese economy. In the chemical industry, market conditions for product groups that had driven the industry, including petrochemical products, semiconductor-related products and EV batteries, remained weak. As fuel and raw material prices stayed high, the company recognized that a continued challenging operating environment was unavoidable, including unavoidable effects on earnings.」

「During the cumulative second quarter, economic activity normalized as social restrictions related to COVID-19 were eased, with signs of a recovery in private consumption and inbound demand. However, the outlook remained uncertain due to concerns about the impact of rising prices, currency movements and global monetary tightening on the economy. The chemical industry also continued to face a challenging operating environment, as markets, particularly semiconductor-related markets, stagnated while raw material and energy costs remained high, making pressure on earnings unavoidable.」

「During the cumulative first quarter, economic activity in Japan gradually recovered as social restrictions were eased following COVID-19's reclassification under the Infectious Diseases Control Law and inbound demand recovered. However, the outlook remained uncertain due to rising energy and raw material prices, currency movements, global inflation, and volatility in financial and capital markets. In the chemical industry as well, with the semiconductor-related market continuing to stagnate, the company considered it necessary to continue closely monitoring developments, including persistently high fuel and raw material prices and short-term fluctuations in foreign exchange rates. It believed that uncertainty about the outlook was increasing.」

「During the cumulative third quarter, the number of COVID-19 cases surged with the arrival of the seventh and eighth waves, while constraints on raw material procurement caused by the situation in Ukraine and lockdowns in China, as well as rapid yen depreciation, drove up fuel and raw material prices and general prices. As economic conditions are expected to continue weighing on the economy, normalization of economic activity is expected to take considerable additional time.」

「During the cumulative second quarter, economic conditions continued to weigh on the economy, with prices for fuel and raw materials and general prices rising due to the sharp increase in COVID-19 cases associated with the seventh wave, constraints on raw material procurement caused by the situation in Ukraine and lockdowns in China, and the rapid depreciation of the yen. The outlook is expected to remain uncertain and unpredictable for some time.」

「However, the outlook remains uncertain due to persistently high fuel and raw material prices, yen depreciation and rising geopolitical risks. Although business sentiment in the chemical industry is on a recovery trend, the company considers it important to continue monitoring developments closely because heightened tensions surrounding Ukraine, surging energy prices, and trends in monetary policy and foreign exchange markets could significantly affect economic activity.」

「The economic outlook remains uncertain because the containment of COVID-19 cannot be forecast globally due to the impact of highly transmissible variants. In addition, rising geopolitical risks, higher fuel and raw material prices, and a weakening yen mean that the business environment surrounding the company is expected to remain unpredictable.」

「During the cumulative third quarter, the Japanese economy was recovering after economic stagnation caused by COVID-19, as the number of new infections fell sharply from October and various restrictions were eased. However, concerns remain about another increase in new infections, while tight maritime transport capacity and rising fuel and raw material prices mean that economic activity is expected to require considerable additional time to normalize.」

「During the cumulative second quarter, the Japanese economy showed signs of recovery from the deterioration in domestic and overseas economies caused by the spread of COVID-19. However, the normalization process is expected to take some time, as fuel and raw material prices have gradually risen and maritime transport supply and demand have tightened due to worsening global port conditions and container shortages.」

「Although business sentiment in the chemical industry is on a recovery trend, the company considers it important to closely monitor developments, as COVID-19 could significantly affect domestic and overseas economic activity and financial markets depending on the course of the pandemic.」

「During the cumulative third quarter, expectations for an economic recovery increased as vaccination programs progressed in various countries while COVID-19 continued to spread. However, economic activity remained depressed, with corporate earnings falling sharply and employment conditions deteriorating, and the situation remained challenging and uncertain.」

「During the cumulative second quarter, the deterioration in domestic and overseas economies caused by the global spread of COVID-19 showed signs of recovery, but the situation remains challenging and the outlook uncertain, with lockdown measures being reintroduced in Europe and elsewhere. The chemical industry also remains unpredictable amid worsening corporate earnings caused by weak sentiment and market conditions, and the company recognizes the importance of closely monitoring changes in the external environment surrounding it.」

「During the cumulative first quarter, the Japanese economy became extremely challenging as domestic and overseas economies deteriorated rapidly due to the global spread of COVID-19. The chemical industry also remains unpredictable amid worsening corporate earnings caused by weak sentiment and market conditions, and the company considers it important to closely monitor changes in the external environment surrounding it.」

「The economic outlook remains uncertain, as concerns about COVID-19 infection have yet to be dispelled, the timing of containment and the eventual impact remain difficult to foresee, and the business environment surrounding the company is expected to remain unpredictable.」

「During the cumulative third quarter, the Japanese economy remained uncertain due to the impact of the post-consumption-tax-increase economy, developments in trade issues between the United States and China, and concerns about slowdowns in the Chinese and European economies. In the chemical industry, domestic demand was also losing strength, and the outlook remained uncertain amid deterioration in corporate earnings caused by worsening sentiment and weak market conditions.」

「During the cumulative second quarter, increasingly cautious views of the Japanese economy have become widespread as uncertainty about external demand grows due to the prolonged US-China trade dispute. In the chemical industry, international market conditions are weakening, while rising crude oil prices resulting from heightened tensions in the Middle East are leading to higher petrochemical product prices. The outlook remains uncertain, including with respect to currency movements.」

「During the cumulative first quarter, the Japanese and overseas economies became increasingly uncertain due to factors including intensifying US-China trade friction, and the situation requires careful assessment of the outlook. The chemical industry also needs to closely monitor the external environment, future movements in petrochemical product prices and currency movements.」

「During the fiscal period, the Japanese economy remained stable. Although external demand softened due to a slowdown in the global economy, private consumption and capital investment remained firm domestically amid favorable employment conditions. However, concerns about an economic downturn have emerged since the beginning of the year, including further weakness in exports, and uncertainty is increasing.」

「During the cumulative third quarter, the Japanese economy remained relatively firm, supported by solid corporate earnings, improvements in employment and income conditions, and a recovery in private consumption. However, concerns remain about an economic downturn resulting from global developments, including intensifying US-China trade friction, and increasingly cautious views of the outlook are emerging.」

「During the cumulative second quarter, the Japanese economy remained relatively stable, supported by solid corporate earnings, increased capital investment and a gradual recovery in private consumption. However, concerns are growing about an economic downturn resulting from global developments, including intensifying US-China trade friction, and the outlook is becoming increasingly uncertain.」

「In the chemical industry as well, plant operations have remained firm and market conditions have stayed at high levels. However, the outlook remains uncertain, given the direction of US government tariff increases, the upward trend in crude oil prices and currency movements.」

「The chemical industry has also continued to perform firmly amid active capital investment and stable market conditions. Although there are concerns about the impact of future fluctuations in crude oil prices and export selling prices, the business environment remains resilient.」

「In the chemical industry as well, favorable conditions have emerged, particularly in petrochemical markets, in line with economic growth, and demand has remained firm. Although there are concerns about the impact of future fluctuations in crude oil prices and export selling prices, the business environment remains resilient.」

「In the chemical industry as well, supply-demand conditions and plant operations have remained firm in line with economic growth. Although there are concerns about the impact of future fluctuations in petrochemical feedstock prices and export selling prices, the business environment remains resilient.」

「In the chemical industry, supply and demand conditions and facility utilization remain firm. Although concerns remain about the impact of fluctuations in petrochemical raw material prices and export sales prices due to future movements in crude oil prices and foreign exchange rates, the business environment remains resilient.」

「Regarding the economic outlook, concerns about downside risks to the global economy due to slower growth in emerging-market economies such as China, the impact of crude oil and foreign exchange fluctuations on corporate earnings, and increased vigilance regarding geopolitical risks involving specific regions lead us to believe that the operating environment surrounding the company will remain unpredictable.」

「During the first nine months of the fiscal year, Japan's economy continued to recover gradually. Although the yen appreciated and share prices declined during the first half, employment and income conditions continued to improve, while exports recovered and inventory adjustments progressed in the second half. However, the outlook for the economy remained uncertain, given the slowdown in emerging-market economies and uncertainty over the effects of policies to be implemented by the new US administration.」

「Although Japan's economy during the first six months of the fiscal year showed no major change based on trends in real GDP growth, the appreciation of the yen and decline in share prices since the beginning of the year have created stronger headwinds for exports, particularly in the manufacturing sector, affecting corporate performance. While the Bank of Japan introduced new monetary easing measures, the outlook for the economy remained cautious. In the chemical industry, domestic facilities continued to operate at relatively high levels, but the outlook for corporate earnings remained unpredictable amid the effects of yen appreciation and inventory adjustments.」

「Although domestic demand in the chemical industry remains firm, the business environment continues to be unpredictable in light of changes in the operating environment, including the impact of yen appreciation on export sales and increases in imported raw material prices due to a rebound in crude oil prices.」

「Concerns about downside risks to overseas economies, the adverse impact on earnings from fluctuations in foreign exchange rates and crude oil prices, and geopolitical risks in developed countries and elsewhere remain unresolved. We expect the business environment surrounding the Company to remain unpredictable.」