Yen Appreciation and Uncertainty over the Domestic Economy

「Meanwhile, the impact of US tariff policy on exports, particularly automobiles, together with rising crude oil prices and shortages of naphtha supplies associated with heightened tensions in the Middle East, remains a concern for the future economic outlook.」

「Although the economy was supported by improving employment and income conditions and inbound demand amid continued price increases, personal consumption also showed weakness, and the economy remained on a gradual recovery path. Meanwhile, the impact of US tariff policy on exports, particularly automobiles, and higher crude oil prices and shortages of naphtha supplies associated with tensions in the Middle East are areas of concern for the economy going forward.」

「Although Japan's economy was affected by higher prices resulting from the weaker yen, economic conditions remained firm, supported by a recovery in private consumption driven by wage increases and inbound demand, as well as a recovery in capital investment. Meanwhile, the impact of US tariff policy on exports, particularly automobiles, together with rising crude oil prices and shortages of naphtha supplies associated with heightened tensions in the Middle East, remains a concern for the future economic outlook.」

「Although yen depreciation led to higher prices, the economy remained solid, supported by a recovery in personal consumption driven by inbound demand and wage increases, and a recovery in capital investment. Meanwhile, exports, particularly automobiles, have come under downward pressure due to the impact of US tariff policy, and future trends in exchange rates and economic conditions are a concern.」

「Amid continued yen depreciation and labour shortages, the economy remained solid, supported by a recovery in personal consumption driven by inbound demand and wage increases, and a recovery in capital investment. Meanwhile, exports, particularly automobiles, declined due to the impact of US tariff policy. The effects of new reciprocal tariffs to be applied from August onward on exchange rates and economic conditions are a concern.」

「Although the Noto Peninsula earthquake had an impact, improvements in corporate performance driven by yen depreciation and the pass-through of higher costs were sustained, and the economy recovered gradually. Wage increases and an expansion in capital investment are expected against the backdrop of labour shortages and improving employment conditions, raising expectations for a recovery in personal consumption toward an exit from deflation.」

「As the economy recovered from the COVID-19 pandemic, supply constraints eased, corporate performance expanded on the back of yen depreciation, inbound demand recovered and personal consumption grew, resulting in a gradual economic recovery.」

「Although yen depreciation since the previous year generally supported corporate performance, resource and energy prices surged, wage reviews progressed, and companies increasingly passed higher costs on to selling prices. In addition, as the economy recovered from the COVID-19 pandemic, supply constraints eased and production normalised. The economy also benefited from growth in inbound demand and personal consumption, and recovered gradually.」

「Inflation has become evident through elevated import prices, persistently high energy prices and wage increases. Meanwhile, the economy is recovering gradually as companies have accelerated the pass-through of higher costs to selling prices and global companies have maintained strong performance amid prolonged yen depreciation.」

「Although yen depreciation since the previous year generally supported corporate performance, inflation became evident as resource and energy prices surged and shortages of semiconductors and other components persisted. In addition, wage reviews, which had been restrained for many years, are progressing, and companies are increasingly passing higher costs on to selling prices.」

「Although restrictions on activity were eased despite repeated waves of COVID-19 infections, shortages of semiconductors and other components, surging energy and raw-material prices, and disruptions to logistics networks continued, remaining a drag on the economic recovery. Yen depreciation resulting from differences in monetary policy between Japan and Western countries generally supported corporate performance, but led to deterioration in importers' performance and personal consumption.」

「Although restrictions on activity have been eased despite repeated waves of COVID-19 infections, shortages of semiconductors and other components, surging energy and raw-material prices, and disruptions to logistics networks have continued, remaining a drag on the economic recovery. Yen depreciation resulting from differences in monetary policy between Japan and Western countries has generally supported corporate performance, but there are concerns about its adverse impact on importers' performance and personal consumption.」

「Although restrictions on activity have been eased despite repeated waves of COVID-19 infections, shortages of semiconductors and other components, surging energy and raw-material prices, and disruptions to logistics networks have continued, remaining a drag on the economic recovery. Yen depreciation resulting from the widening interest-rate differential with the US has supported corporate performance overall, but its impact on personal consumption is a concern, and future policy management is being closely watched.」

「Although infections with the Omicron variant spread in Japan, they peaked in February and restrictions on activity have since been eased. Meanwhile, shortages of semiconductors and other components, surging energy and raw-material prices, and disruptions to logistics networks have yet to subside, remaining a drag on the economic recovery. The yen has also weakened against the backdrop of US monetary policy and the situation in Ukraine, increasing uncertainty about the economy.」

「While personal consumption, including face-to-face services, continued to languish due to COVID-19, manufacturing remained solid, supported by exports amid the recovery in overseas economies. From August onward, vaccinations, which had been delayed, progressed and infections declined markedly. However, shortages of semiconductors and other components from the ASEAN region led to expanding production cuts by automakers, becoming a drag on the economic recovery.」

「While personal consumption, including face-to-face services, continued to languish due to COVID-19, manufacturing remained solid, supported by exports amid the recovery in overseas economies. From August onward, vaccinations, which had been delayed, progressed and infections declined markedly. However, shortages of semiconductors and other components from the ASEAN region led to expanding production cuts by automakers, becoming a drag on the economic recovery.」

「While manufacturing remained solid, supported by exports amid the recovery in overseas economies, personal consumption, including face-to-face services, continued to languish due to the reissuance and extension of the state of emergency, leading to a widening divergence in economic conditions by industry. Personal consumption is expected to begin recovering as vaccinations accelerate and restrictions on activity are lifted.」

「Although economic activity was in a phase of rapid recovery at the end of last year, concerns about stagnation centred on personal consumption, including face-to-face services, increased after the state of emergency was reissued in January this year due to the resurgence of COVID-19 infections.」

「Although there are downside risks to the economy, including the reissuance of the state of emergency in Japan, government stimulus measures are expected to support the economy and bring about a gradual recovery.」

「In Japan, inbound demand declined from January due to the impact of COVID-19, and people also began refraining from going out in March. In mid-April, the government declared a state of emergency and implemented large-scale COVID-19 measures, including special fixed benefits, sustainability subsidies and special measures under employment adjustment subsidies. Although the declaration was lifted from mid-May and economic activity has recovered gradually, the recovery in personal consumption has remained slow compared with the recovery in overseas exports.」

「Although the declaration was lifted from mid-May, the recovery in the domestic economy remained slow due to continued pressure to refrain from consumption and disruptions to supply chains.」

「In Japan, inbound demand declined from January due to the impact of COVID-19, and domestic consumption slowed significantly in March as people also began refraining from going out. Corporate performance was also deteriorating significantly, particularly in manufacturing, due to disruptions to supply chains, beginning with a decline in exports to China.」

「Employment conditions remained strong, and personal consumption showed a gradual recovery. Although a temporary decline in demand was seen after the consumption tax increase from October, the economy was expected to avoid a prolonged downturn through government measures to support economic activity. Although investment related to labour-saving and digitalisation in response to labour shortages remained solid, exports and production declined amid worsening external conditions, including US-China trade friction and the slowdown in the Chinese economy, and the manufacturing sector showed signs of slowing.」

「Employment conditions remained strong, and personal consumption showed a gradual recovery. Even after the consumption tax increase from October, the economy was expected to avoid a downturn through government measures to support economic activity, including the reduced tax rate. Although investment related to labour-saving and digitalisation in response to labour shortages remained solid, exports and production declined amid worsening external conditions, including US-China trade friction and the slowdown in the Chinese economy, and the manufacturing sector showed signs of slowing.」

「Employment conditions remained strong, and personal consumption showed a gradual recovery. Although capital investment aimed at labour-saving in response to labour shortages remained solid, exports and production declined amid the slowdown in the Chinese economy, and the economy showed signs of slowing recently.」

「Employment conditions remained strong, and personal consumption showed a gradual recovery. Although capital investment aimed at labour-saving in response to labour shortages remained solid, exports and production declined amid the slowdown in the Chinese economy, and the economy showed signs of slowing recently.」

「Although there were concerns such as higher resource prices, employment conditions remained strong and consumer sentiment showed signs of improvement. Corporate performance also remained solid, and capital investment aimed at labour-saving in response to labour shortages proceeded. Meanwhile, the imposition of additional US tariffs and their impact remain areas of concern for Japan.」

「Although there were concerns such as higher resource prices, employment conditions remained strong and consumer sentiment showed signs of improvement. Corporate performance also remained solid, and capital investment aimed at labour-saving in response to labour shortages proceeded. Meanwhile, the imposition of additional US tariffs and their impact remain areas of concern for Japan.」

「Despite destabilising factors such as yen appreciation since the beginning of the year and higher resource prices, employment conditions remained strong and consumer sentiment showed signs of improvement. Corporate performance also remained solid, and capital investment aimed at labour-saving in response to labour shortages proceeded. Meanwhile, US trade policy and the situation in North Korea remain areas of concern for Japan.」

「The Japanese economy saw continued improvement in employment conditions and some brightening in consumer sentiment. Corporate performance also remained solid, supported by a recovery in exports following the yen's depreciation since the end of last year, and the economy is recovering gradually. Meanwhile, US trade policy and the situation in North Korea remain areas of concern for Japan.」

「The Japanese economy saw continued improvement in employment conditions and some brightening in consumer sentiment. Corporate performance also remained solid, supported by a recovery in exports following the yen's depreciation since the end of last year, and the economy is recovering gradually. Meanwhile, US trade policy and the situation in North Korea remain areas of concern for Japan.」

「In Japan, employment conditions have been improving against a backdrop of labor shortages, and consumer sentiment has shown some improvement. Corporate earnings have also remained firm, supported by a recovery in exports following the yen's depreciation since the end of last year, and the economy is recovering gradually. Meanwhile, US trade policy and the situation in North Korea are concerns for Japan.」

「In Japan, concerns over the economic outlook spread due to the yen's appreciation, the weak stock market and the slowdown in the Chinese and emerging-market economies from the beginning of the year. However, stock prices recovered from November onward on expectations for the economic policies of the new US administration, and the yen depreciated sharply.」

「The automotive market has remained strong since last year against a backdrop of lower gasoline prices, and although sales denominated in US dollars increased, sales were ¥10,004 million, compared with ¥10,372 million in the same quarter of the previous year, due to the impact of the yen's appreciation.」

「In Japan, consumer spending showed signs of stagnation due to the weak stock market and the yen's appreciation since the beginning of the year. Corporate earnings have also begun to suffer from the sharp appreciation of the yen and the slowdown in the Chinese and emerging-market economies. Although the Bank of Japan introduced negative interest rate policy for the first time, its effect has been limited.」