Slowing Overseas and Domestic Economies and Increasing Uncertainty in Demand Conditions

「The economic environment in fiscal 2026 remained unpredictable as US tariff policy and soaring crude oil prices associated with the worsening situation in the Middle East affected the global economy, while various geopolitical risks also intensified.」

「During the interim consolidated fiscal period, the business environment remained generally unpredictable due to numerous uncertainties, including the impact of reciprocal tariffs imposed by the US government, their effects on the global economy and foreign exchange, and geopolitical risks. However, automotive and OA equipment demand remained firm, while medical-related demand, particularly in the US and Europe, remained strong.」

「With the impact of US tariff policy on the global economy impossible to predict, the economic environment in fiscal 2025 remained unpredictable due to persistently high inflation rates worldwide, foreign exchange volatility, and prolonged geopolitical risks including regional conflicts.」

「During the interim consolidated fiscal period, automotive-related demand remained sluggish due to the rise of Chinese manufacturers and certification fraud issues. Demand for OA equipment remained strong, while the medical business, particularly in the US and Europe, continued to expand steadily.」

「Concerns remain that the slowdown in the Chinese economy will affect not only Japan but the global economy, and that interest rates will remain elevated due to continuing inflation. Geopolitical risks, including conflicts in the Middle East and Ukraine, have also emerged. We regard the global economy in fiscal 2024 as likely to remain unpredictable, with these factors posing risks.」

「During the cumulative third quarter of the consolidated fiscal year, concerns remained about the impact of elevated interest rates in various countries and continued global inflation, but the global economy recovered moderately overall. Although differences in strength were seen among manufacturers and vehicle models equipped with some of the Company’s products, the automotive industry generally continued to trend toward recovery due to solid demand and the easing of semiconductor shortages.」

「During the cumulative second quarter of the consolidated fiscal year, the global economy recovered moderately overall despite interest rate hikes, global inflation, and the prolonged Ukraine crisis. Although differences in strength were seen among manufacturers and vehicle models equipped with some of the Company’s products, the automotive industry generally continued to trend toward recovery due to solid demand and the easing of semiconductor shortages.」

「During the cumulative first quarter of the consolidated fiscal year, the global economy remained uncertain due to interest rate hikes by central banks, global inflation, and the prolonged Ukraine crisis. Although differences in strength were seen among manufacturers and vehicle models equipped with some of the Company’s products, the automotive industry, the Company’s main market, generally trended toward recovery due to solid demand and the easing of semiconductor shortages.」

「In addition to the risk of recession associated with financial instability and accelerating inflation in the US and Europe, geopolitical risks including the worsening situation in Ukraine and tensions between China and Taiwan remain. We expect the global economy in fiscal 2023 to remain unpredictable.」

「During the cumulative third quarter of the consolidated fiscal year, restrictions on activity were eased domestically and overseas, including the lifting of China’s zero-COVID policy. However, uncertainty continued due to rising energy and logistics costs, accelerating inflation, and interest rate increases by central banks. Although demand in the automotive industry, the Company’s main market, was beginning to recover, difficult conditions continued as production plans were repeatedly revised downward because the semiconductor shortage had not been resolved.」

「During the cumulative second quarter of the consolidated fiscal year, the global economy remained uncertain despite the easing of activity restrictions related to COVID-19, due to lockdowns in China, which continued its zero-COVID policy, global inflation, the semiconductor shortage continuing from the previous year, and soaring energy costs including crude oil and natural gas and raw material costs. Although demand in the automotive industry, the Company’s main market, was strong, difficult conditions continued as production plans were repeatedly revised downward due to the semiconductor shortage and the impact of China’s zero-COVID policy.」

「During the cumulative first quarter of the consolidated fiscal year, the global economy remained uncertain despite the easing of activity restrictions related to COVID-19, due to lockdowns in China, which continued its zero-COVID policy, global inflation, the semiconductor shortage continuing from the previous year, tight logistics, and soaring energy costs including crude oil and natural gas. Although demand in the automotive industry, the Company’s main market, was strong, difficult conditions continued as production plans were repeatedly revised downward due to the semiconductor shortage and the lockdown in Shanghai, China.」

「Although restrictions were expected to be eased, particularly in emerging economies, and economic activity to normalize, the response differed by country and region. China’s zero-COVID policy, as illustrated by the lockdown in Shanghai, posed a risk of significantly affecting supply chains in the future. In addition, the worsening situation in Ukraine, high crude oil prices, and high raw material prices were expected to continue for the time being. We regard the global economy in fiscal 2022 as remaining unpredictable, with risks continuing to warrant close attention.」

「During the cumulative third quarter of the consolidated fiscal year, vaccination progressed mainly in developed countries and the economy gradually recovered, but uncertainty increased again due to soaring raw material and logistics costs and the rapid global spread of the Omicron variant of the novel coronavirus. In addition, although demand in the automotive industry, the Company’s main market, was strong, production plans were revised due to delays in the supply of automotive parts from ASEAN and shortages of raw materials such as semiconductors and resin materials, which had a material impact on the Company’s results.」

「In addition, although demand in the automotive industry, the Company’s main market, was strong, production plans were revised due to delays in the supply of automotive parts from ASEAN and global shortages of raw materials such as semiconductors and resin materials, which had a material impact on the Company’s results.」

「During the cumulative first quarter of the consolidated fiscal year, concerns about shortages of semiconductors and raw materials and the renewed spread of the novel coronavirus in Asia increased. However, economic activity resumed in earnest in major Western countries and China as vaccination progressed, and signs of recovery were seen, particularly in manufacturing.」

「From July onward, some recovery was seen in China and elsewhere due to the easing of restrictions on economic activity and fiscal stimulus in major countries. However, the renewed global spread of infections caused by variants and the risk of supply shortages of raw materials such as semiconductors and resins left the situation highly uncertain.」

「From July onward, restrictions on economic activity were eased, fiscal stimulus was implemented in major countries, and China’s economic recovery was becoming more evident. However, infections began to spread globally again from late November, and the overall economic recovery appeared to be stagnating.」

「During the cumulative second quarter of the consolidated fiscal year, the situation was extremely difficult from April to June as countries worldwide required people to refrain from activities, including through restrictions on entry and going out, due to the spread of the novel coronavirus, causing personal consumption to deteriorate significantly. From July to September, the economy moved toward recovery, partly because the easing of restrictions on economic activity and fiscal stimulus in major countries proved effective.」

「During the cumulative first quarter of the consolidated fiscal year, the economic environment remained extremely difficult as the spread of the novel coronavirus led countries worldwide to impose restrictions on entry and going out, requiring people to refrain from activities beyond economic activity itself, and personal consumption deteriorated significantly.」

「The full-scale spread of the novel coronavirus that began in January 2020 severely restricted trade and transportation worldwide, as well as economic activity in various countries, causing the global economy to slow sharply. In the fields relevant to the Company, the automotive market also remained sluggish due to the impact of the trade friction and the novel coronavirus.」

「During the cumulative third quarter of the consolidated fiscal year, personal consumption in the US remained solid due to favorable employment conditions, although concern over the impact of US-China trade friction remained in manufacturing activity. China and the US reached a partial agreement in negotiations over tariffs, but the impact of the trade friction continued. In Europe and Japan, uncertainty about the outlook increased as exports stagnated under the impact of the Chinese economy. In the fields relevant to the Company, the automotive market continued to show signs of a slowdown due to the trade friction.」

「During the cumulative second quarter of the consolidated fiscal year, US business activity remained strong, supported by solid personal consumption, although concern over US-China trade friction increased. China’s economy continued to slow due to the trade friction. In Europe and Japan, uncertainty about the outlook increased as exports stagnated under the impact of the Chinese economy. In the fields relevant to the Company, the automotive market continued to show signs of a slowdown due to the trade friction.」

「During the cumulative first quarter of the consolidated fiscal year, US business activity remained strong, supported by solid personal consumption, although concern over US-China trade friction increased. China’s economy continued to slow due to the trade friction. In Europe and Japan, uncertainty about the outlook increased as exports stagnated under the impact of the Chinese economy. In the fields relevant to the Company, the automotive market continued to show signs of a slowdown due to the trade friction.」

「During the cumulative third quarter of the consolidated fiscal year, the US and China began to see impacts on corporate earnings from the intensifying US-China trade friction, with a particularly clear slowdown in Chinese consumption. Although Europe remained firm in the near term, uncertainty about its outlook increased due to issues including the UK’s departure from the EU. Japan remained generally firm, but concerns increased as the impact of the trade friction began to emerge.」

「During the cumulative second quarter of the consolidated fiscal year, economic expansion continued in the US and Europe, supported by solid corporate earnings. In China, the adverse effects of escalating trade friction began to emerge, and uncertainty about the outlook increased. Japan moved toward recovery against a backdrop of generally solid global economic conditions.」

「During the cumulative first quarter of the consolidated fiscal year, economic expansion continued in the US, Europe, and Asia, supported by solid corporate earnings. However, uncertainty about the outlook increased as China and the EU implemented retaliatory measures against US import tariffs.」

「During the consolidated fiscal year, the US and Europe continued to recover, supported by expanding employment and improving corporate earnings. Emerging economies including China and Southeast Asia also moved toward recovery, driven by solid external demand. Japan continued to recover moderately on the back of strong corporate earnings and solid employment conditions, although concerns remained about the impact of the stronger yen.」

「During the cumulative third quarter of the consolidated fiscal year, the US and Europe continued to recover, supported by expanding employment and improving corporate earnings. Emerging economies including China and Southeast Asia also moved toward recovery, driven by solid external demand. Japan continued to recover moderately, supported by strong corporate earnings and solid employment conditions.」

「During the cumulative second quarter of the consolidated fiscal year, the US economy continued to expand moderately, supported by favorable employment conditions and corporate earnings, while Europe remained firm due to monetary easing and increased manufacturing exports. Although Asia faced restrictions on real estate investment in China and environmental regulations, it remained generally resilient, supported by strong consumption in Southeast Asia. Japan continued to trend toward recovery on the back of strong corporate earnings and solid employment conditions.」

「During the cumulative first quarter of the consolidated fiscal year, the US economy continued to expand moderately, supported by favorable employment conditions and resilient personal consumption. Europe remained firm, driven by strong German manufacturing and improved economic conditions in France following the presidential election. In Asia, signs of recovery emerged, supported by increased infrastructure investment and robust high-tech industries in China and strong consumption in Southeast Asia. In Japan, the economy entered a recovery trend on the back of solid employment conditions and increased personal consumption.」

「The global economy is expected to expand, but uncertainty is also increasing due to the impact of various US government policies, Brexit and the rise of right-wing parties in major EU countries, slowing growth in China, conditions on the Korean Peninsula, and the risk of a stronger yen. We expect the difficult situation to continue, with little room for optimism.」

「During the cumulative third quarter of the consolidated fiscal year, expectations increased in the US for fiscal stimulus and tax cuts after the inauguration of the new Trump administration became certain, while concerns also emerged over excessive protectionism. In Europe, uncertainty related to the UK’s departure from the EU persisted, although the economy remained firm in the near term. Growth continued to slow in China and Southeast Asia, although signs of bottoming out appeared in some areas. In Japan, the economy moved toward recovery amid the global economic rebound and the weaker yen.」

「During the cumulative second quarter of the consolidated fiscal year, the US economy continued to expand moderately, supported by improving employment conditions and solid personal consumption. Although Europe remained firm in the near term, uncertainty about its outlook increased due to the impact of the UK’s departure from the EU. China’s economy slowed due to factors including excess investment, while Southeast Asia remained generally resilient despite being affected in part by the Chinese economy. In Japan, the economy stagnated, with exports remaining flat amid the stronger yen.」

「Overseas, the US economy continued to expand moderately, supported by improving employment conditions and solid personal consumption, while although Europe remained firm in the near term, uncertainty about its economic outlook increased after the UK decided to leave the EU. China’s economy was slowing, and Southeast Asia, affected by China, also remained in a difficult situation. In Japan, the economy stagnated due to sluggish personal consumption and the stronger yen.」