Economic downside risks from high prices, labor shortages, China’s economic slowdown and monetary tightening

「During the interim accounting period, the Japanese economy maintained a moderate recovery trend, supported by improvements in employment and income conditions and firm inbound tourism demand. At the same time, the impact of inflation accompanying higher prices has become apparent and concerns over foreign exchange volatility have persisted. Although overseas economies have also shown signs of a moderate recovery, the outlook for the global economy remains uncertain due to continuing geopolitical risks relating to Ukraine and the Middle East, as well as the impact of U.S. tariff policies.」

「Although overseas economies are also on a moderate recovery track, concerns remain over a global economic slowdown caused by inflation worldwide, monetary tightening measures in various countries and the stagnation of China's real estate market, as well as continuing geopolitical risks arising from instability in the Middle East. The outlook remains uncertain, with concerns over a slowdown in the global economic recovery and the impact of volatility in foreign exchange markets.」

「Meanwhile, resource and raw material prices remain elevated, including the impact of the weaker yen, while inflation caused by higher prices and labor shortages have become apparent. Although overseas economies have benefited from positive developments such as the lifting of border controls and the easing of restrictions on activities in various countries, concerns remain over an economic slowdown resulting from monetary tightening by the central banks of the United States and Europe and the stagnation of the real estate market in China, leaving the outlook uncertain.」

「However, the outlook remains uncertain amid concerns in Japan over sharply higher resource and raw material prices, including the impact of yen depreciation, inflation caused by rising prices, labor shortages, the prolonged effects of Russia's invasion of Ukraine and the slowdown in the Chinese economy overseas, as well as the risk of an economic downturn resulting from monetary tightening.」