Downside Risks to Economic Activity from Uncertainty in Overseas Economies and the UK’s Withdrawal from the EU

「During the cumulative second quarter, Japan's economy moved toward normalization of economic activity following the reclassification of COVID-19 as a Class 5 infectious disease. However, the outlook remains uncertain due to the prolonged situation in Ukraine, the war in the Middle East, tensions among the United States, China and Russia, persistently high resource and raw material prices, and rising prices caused by yen depreciation.」

「The overall outlook has become increasingly uncertain as the pace of recovery in the European and U.S. economies has slowed due to the worsening situation in Ukraine and repeated monetary tightening by central banks in Europe and the United States, while the Chinese economy has stagnated amid deteriorating U.S.-China relations and Japan has begun to shift away from its monetary easing policy.」

「In China, strict lockdowns not only significantly curtailed economic activity but also caused global supply chain disruptions. These factors delayed the normalization of the domestic economy, while reduced automobile production due to semiconductor shortages and the outflow of income overseas caused by higher resource prices and yen depreciation created an environment in which economic activity remained sluggish.」

「During the cumulative third quarter, Japan's economy began to move onto a moderate recovery path as COVID-19 countermeasures were gradually eased and corporate activity gradually became more vigorous. However, concerns over inflation caused by higher prices, instability in international politics involving Ukraine and Taiwan, and the resulting international financial instability remain simmering, and the outlook continues to be uncertain.」

「During the cumulative second quarter, Japan's economy gradually recovered as socioeconomic activity normalized under the policy of living with COVID-19. However, broad-based inflation extending to agricultural products was triggered by surging crude oil and natural gas prices, and the yen's depreciation has also progressed, leaving the outlook uncertain. In addition, the increasingly acute political conflicts involving Ukraine and Taiwan among Russia, China, the United States, Europe and Japan are hindering the recovery of the global economy.」

「During the cumulative first quarter, Japan's economy showed a recovery in socioeconomic activity and a clearer recovery in economic conditions as restrictions on activity imposed in response to COVID-19 were eased. The global economy can also be said to be generally on a recovery trend as restrictions on activity have been eased in various countries, but the outlook remains uncertain because, in addition to the worldwide surge in prices caused by the rapid recovery in demand, energy prices and the supply-demand balance remain a concern due to the prolonged situation in Ukraine. In addition, while aggressive interest-rate hikes have been implemented in Europe and the United States to contain inflation, the yen has become increasingly unstable as the Bank of Japan continues monetary easing, creating situations in which price increases may accelerate further.」

「Just as crude oil and raw material prices surged amid global supply chain disruptions caused by the prolonged spread of infectious disease, Russia launched a large-scale invasion of Ukraine. This heightened concern over geopolitical tensions and the transition to a wartime economy, leading to sustained high prices for international commodities.」

「However, infections began spreading rapidly again in Japan after the start of the year, while the spread of infections has continued in other countries, causing the global economy as a whole to trend toward stagnation. In addition, international commodity markets, including crude oil, have surged against the backdrop of military tensions between NATO and Russia over Ukraine, increasing uncertainty over the outlook for the global economy.」

「Although signs of a recovery have emerged as measures to prevent the spread of infection and promote vaccination take effect, the outlook remains extremely uncertain, including the impact of infection trends on domestic and overseas economies and the impact of higher material costs through supply chains.」

「During the cumulative first quarter, Japan's economy remained in a severe situation, as economic activity was constrained in some regions by the issuance of states of emergency and priority preventive measures to prevent the spread of disease, amid the renewed spread of COVID-19.」

「During the fiscal year, Japan's economy remained generally difficult due to the impact of the spread of COVID-19. Even after the state of emergency was lifted in March of this year, the number of infections rose again, partly due to more transmissible variants, and uncertainty continued because the timing of containment could not be forecast.」

「During the cumulative third-quarter period, Japan's economy became extremely difficult as social and economic activity stagnated due to the spread of COVID-19. Personal consumption showed signs of recovery after the state of emergency was lifted in May, but the rapid spread of infections from December onward is expected to keep the outlook uncertain. Overseas, the economies of major countries other than China have also not achieved a full-fledged recovery, as the spread of COVID-19 has not been brought under control.」

「During the cumulative second-quarter period, what could be described as a second wave of COVID-19 spread worldwide, causing economic activity to remain generally sluggish. The major economies recorded substantial negative growth, broadly, from April to June, but turned slightly positive from July to September as a rebound; nevertheless, severe economic conditions continued in major countries other than China. The outlook for the global economy is also considered extremely uncertain until fundamental measures, such as vaccines, to address COVID-19 are established.」

「During the cumulative first-quarter period, the spread of COVID-19 caused corporate activity and personal consumption to decline sharply worldwide, and the economies of major advanced countries, including Japan, all shifted to negative growth. In addition, tensions between the US and China intensified, making the outlook for the global economy extremely uncertain.」

「During the fiscal year, Japan's economy saw improvements in the employment and income environment through year-end, but uncertainty in the global economy, including US-China trade friction and the UK's withdrawal from the EU, increased, successive natural disasters occurred, and the consumption tax increase began to affect personal consumption. The spread of COVID-19 then caused the domestic and global economies to shift to negative growth, further intensifying uncertainty about the outlook.」

「During the cumulative third-quarter period, Japan's economy remained uncertain despite improvements in the employment and income environment, as exports and production weakened amid concerns about a slowdown in the global economy stemming from US-China trade friction and other factors, in addition to the impact of the consumption tax increase on personal consumption and successive natural disasters.」

「During the cumulative second-quarter period, Japan's economy continued to recover gradually against the backdrop of improvements in the employment and income environment, but uncertainty about the outlook intensified due to overseas factors including US-China trade friction, the UK's withdrawal from the EU and heightened tensions in the Middle East, as well as concerns about the impact of the consumption tax increase on the economy.」

「During the cumulative first-quarter period, Japan's economy remained on a gradual recovery path against the backdrop of improvements in the employment and income environment, but the outlook remained uncertain as disruption associated with the UK's withdrawal from the EC and US-China trade friction began to affect the domestic economy.」

「During the fiscal year, Japan's economy remained on a gradual recovery path as corporate earnings improved and the employment and income environment recovered gradually, but the outlook remained uncertain due to persistent consumer thrift, concerns about a slowdown in China's economy accompanying prolonged US-China trade friction, and uncertainty over economic conditions and policy in Europe.」

「During the first 3 quarters of the current fiscal year, Japan's economy was affected by a slowdown in China's economy originating in the US-China trade friction, a succession of natural disasters, and instability in the foreign exchange and stock markets. However, personal consumption began to recover and corporate earnings continued to improve, and the economy remained on a gradual recovery trend.」

「During the cumulative second-quarter period, Japan's economy remained on a gradual recovery path as the recovery in personal consumption and improvement in corporate earnings continued, despite the impact of uncertainty in the global economy, successive natural disasters and instability in foreign-exchange and equity markets.」

「Overseas, the outlook remains uncertain due to concerns about protectionist trade friction and uncertain political developments.」

「Risks to the global economy from the politics of individual countries, including geopolitical risks in North Korea and the Middle East, the UK's withdrawal from the EU and trends in US foreign policy, have increased, and overall uncertainty about the outlook has intensified」

「During the cumulative third-quarter period, Japan's economy remained on a gradual recovery path due to improvements in corporate earnings and the employment environment, but the outlook remained uncertain amid uncertainty over the political direction of the US administration and geopolitical risks, mainly surrounding the Korean Peninsula.」

「During the cumulative first-quarter period, Japan's economy remained on a gradual recovery path due to improvements in corporate earnings and the employment and income environment, but the outlook remained uncertain amid US policy developments and rising geopolitical risks overseas.」

「The outlook remains uncertain amid concerns about the impact on the global economy of the UK's withdrawal from the EU and the transition to a new US administration, with exchange rates and share prices fluctuating sharply.」

「The increasing uncertainty surrounding the global economy, including economic stagnation in emerging Asian economies and resource-rich countries such as China and the UK's withdrawal from the EU, has heightened the risk of a downturn in Japan's economy, and the outlook remains uncertain.」