Sluggish Economy and Personal Consumption Due to Yen Appreciation, the UK’s Withdrawal from the EU and Other Factors

「During the fiscal year, the prolonged Russian invasion of Ukraine, Israel's prolonged attacks on Gaza in the Palestinian territories, and attacks by the United States and Israel on Iran resulted in a global oil shortage and high prices.」

「During the consolidated fiscal year, the global shortage of oil and rising prices resulting from Russia's invasion of Ukraine, the prolonged Israeli attacks on the Gaza Strip in the Palestinian territories, and further attacks by the United States and Israel on Iran created a challenging environment. In Japan, real wages declined substantially due to a marked rise in consumer prices, and domestic consumption remained sluggish.」

「During the interim consolidated accounting period, the prices of imported goods, particularly crude oil, resources and food, continued to rise due to the yen's depreciation. Prices for utilities and food also increased, resulting in inflation. Domestic agricultural products and rice prices also soared due to the exceptionally hot summer. Meanwhile, wage growth failed to keep pace with price increases, and real wages continued to decline.」

「The prolonged Russian invasion of Ukraine, Israel's attacks on the Gaza Strip in the Palestinian territories and the destabilization of the situation in the Middle East caused global resource, energy and agricultural commodity prices to rise. In Japan, prices for utilities and food continued to rise, while real wages continued to decline without any sign of abating, putting pressure on domestic consumption.」

「During the fiscal year, global inflation resulted from higher raw material and energy prices caused by the prolonged Russian invasion of Ukraine, Israel's attacks on Gaza in the Palestinian territories and the destabilization of the situation in the Middle East. In Japan, the unprecedented depreciation of the yen continued, driving up import prices. This led to broad-based inflation, declining real wages and sluggish domestic consumption.」

「Meanwhile, high prices resulting from soaring raw material costs and rising labor costs due to labor shortages have placed pressure on the management of small and medium-sized enterprises. Bankruptcies among small and medium-sized enterprises due to excessive debt have also increased. In addition, high prices have reduced workers' real wages, and personal consumption has remained sluggish.」

「During the first half of the fiscal year, Japan's economy normalized as the novel coronavirus disease was reclassified to Category 5. However, higher prices for utilities, food and beverages, in line with rising resource and energy prices, placed significant pressure on domestic consumption. In addition, the declining birthrate and aging population progressed, creating a severe labor shortage across all industries and driving up labor costs.」

「During the first quarter of the fiscal year, the novel coronavirus pandemic, which had lasted for more than 3 years, finally subsided, but domestic industries, particularly small and medium-sized enterprises in regional areas, suffered a major impact on performance. In addition, the prolonged Russian invasion of Ukraine drove up raw material and energy prices, resulting in high prices and inflation, while domestic consumption remained stagnant.」

「During the fiscal year, the spread of the novel coronavirus finally subsided. Industries dependent on domestic demand, which had suffered a major blow during the three-year pandemic, saw a sharp recovery in performance. However, the prolonged Russian invasion of Ukraine caused worldwide inflation through higher raw material and energy prices, leaving personal consumption unstable.」

「During the first nine months of the fiscal year, the eighth wave of the novel coronavirus spread, and many industries, including tourism, food service, transportation and logistics, continued to suffer a major blow. In addition, inflation caused by higher energy, grain and raw material prices resulting from Russia's invasion of Ukraine, as well as significant exchange-rate fluctuations, left the outlook uncertain.」

「During the first half of the fiscal year, the number of infections and deaths declined as vaccination against the spread of novel coronavirus variants became more widespread, and the end of the pandemic finally came into view. Meanwhile, Russia's invasion of Ukraine continued, causing resource and energy prices to rise sharply and leaving the outlook uncertain.」

「During the first quarter of the fiscal year, Japan's economy faced concerns about a recession and an uncertain outlook due to higher prices for resources such as natural gas and oil resulting from Russia's invasion of Ukraine, in addition to the ongoing pandemic, for which no signs of containment were yet visible.」

「From the end of the fiscal year, Russia invaded Ukraine, bringing the long postwar period to an end, and the world encountered an extremely unstable situation in every area, including politics, the economy and culture.」

「During the first nine months of the fiscal year, the fifth wave caused by a novel coronavirus variant subsided, but many industries continued to suffer a major blow. In addition, new variants have emerged, and there is still no clear prospect of bringing the pandemic to an end.」

「During the first half of the fiscal year, the spread of the novel coronavirus remained unabated and repeated declarations of a state of emergency prevented a full-fledged economic recovery.」

「During the fiscal year, the novel coronavirus spread worldwide, with no end in sight, and many industries suffered significant damage. Performance deteriorated sharply, particularly in non-manufacturing industries such as railways and air transport, tourism industries such as lodging, and food service. Income and consumption in regional areas also declined sharply compared with major metropolitan areas.」

「During the first nine months of the fiscal year, the spread of the novel coronavirus continued, severely affecting many industries, not only food service, tourism and transportation.」

「During the first half of the fiscal year, the global spread of the novel coronavirus continued, with no end in sight, and many industries, particularly transportation, transit and tourism, suffered a major blow.」

「During the first quarter of the fiscal year, the global economy suffered a major blow from the spread of the novel coronavirus. Japan's economy was also severely affected across many industries, in both manufacturing and non-manufacturing.」

「During the fiscal year, Japan's economy remained relatively steady across all industries through the end of 2019. From January, however, the novel coronavirus infection reportedly originating in Wuhan, China, spread worldwide, severely affecting many industries, including manufacturing, transportation and other services. Crude oil prices also plunged, financial markets became disorderly, and personal consumption fell sharply due to calls for people to refrain from traveling.」

「During the first nine months of the fiscal year, Japan's economy remained on a gradual recovery trend, but weakness was evident mainly in export industries such as automobiles and machinery. The business environment was also uncertain, with various risk factors including trade issues, the situation in the Middle East and the UK's withdrawal from the EU.」

「During the first half of the fiscal year, personal consumption and capital investment, the pillars of domestic demand, remained firm. However, export industries such as automobiles and machinery continued to struggle as the global economy stagnated due to prolonged US-China trade friction, the sharp slowdown in China's economy and turmoil surrounding the UK's withdrawal from the EU.」

「During the first quarter of the fiscal year, the global economy became increasingly uncertain, with concerns about a slowdown intensifying as the economies of China and Europe slowed and the outcome of the US-China trade war remained unclear. Against this backdrop, business sentiment among export-oriented manufacturers in Japan deteriorated, while the economy was supported in the non-manufacturing sector by gradual improvements in employment and income.」

「During the fiscal year, Japan's economy was supported by the yen's depreciation resulting from large-scale monetary easing, and the performance of automakers and export industries remained strong. However, the outlook has become uncertain due to US-China trade friction and the slowdown in China's economy. Real wages per person were negative, and personal consumption showed no significant growth.」

「During the first nine months of the fiscal year, Japan's economy saw a marked slowdown in exports of capital goods such as production equipment due to the US-China trade war and the slowdown in China's economy. Orders received by major electronic component manufacturers also fell sharply due to weak sales of smartphones such as the iPhone. Concerns about the uncertain outlook for the global economy have emerged, and share prices have become unstable. Personal consumption has also shown no significant growth.」

「During the first half of the fiscal year, Japan's economy performed well in large manufacturers such as automakers and machinery companies, as well as in export industries, supported by the yen's depreciation. However, concerns about an economic slowdown have emerged due to persistently high crude oil prices and higher tariffs resulting from US-China trade friction. Personal consumption also remained sluggish due to higher gasoline prices and frequent natural disasters.」

「During the first quarter of the fiscal year, Japan's economy faced rising input costs as resource prices, including crude oil, increased, weighing on business sentiment among large manufacturers. Rising labor costs due to labor shortages also became a burden on management, particularly in the food service, retail and transportation industries. Wages for non-regular employees continued to rise, but wages for regular employees remained sluggish, and personal consumption has not recovered.」

「Amid the yen's appreciation and rising resource prices resulting from turmoil in international politics, the economic outlook has become uncertain. In the service sector, a severe labor shortage and improving productivity are also major challenges.」

「Although labor shortages remain a concern, there has been no substantial increase in wages, and personal consumption has not recovered.」

「Personal consumption has begun to recover somewhat, but consumers remain strongly inclined to save in preparation for future concerns such as social security, and there is also uncertainty about the outlook, including the risk of another decline in consumption due to a consumption tax increase.」

「During the cumulative first quarter of the current consolidated fiscal year, the Japanese economy continued to recover gradually against a backdrop of a recovery in the global economy, but severe labor shortages and rising labor costs affected the restaurant and transportation industries. In addition, consumers remained strongly inclined to save in preparation for future concerns such as social security, and personal consumption had not yet recovered.」

「During the cumulative third quarter of the current consolidated fiscal year, the Japanese economy saw the yen weaken and share prices rise, leading to improved earnings for Japanese companies focused on exports, including automakers, machinery manufacturers and electrical equipment manufacturers. Meanwhile, inbound consumption at department stores declined sharply as spending per visitor to Japan fell, and higher labor costs due to labor shortages, particularly in the services sector, put pressure on earnings.」

「During the cumulative second quarter of the current consolidated fiscal year, the Japanese economy saw the yen appreciate more than expected, while business sentiment among large companies in the automotive, machinery and electrical equipment sectors failed to improve. Personal consumption also remained sluggish, and the retail industry continued to languish.」

「The yen has continued to appreciate and the dollar to weaken, creating a challenging business environment for export companies such as automakers and electrical equipment manufacturers. Amid growing uncertainty about the outlook for the global and Japanese economies stemming from the issue of the UK’s withdrawal from the EU, corporate capital investment and personal consumption have also stagnated.」