Exposure to Overseas Markets and Conditions

「During the six months ended the current interim consolidated fiscal year, the global economy was generally on a gradual recovery path, but uncertainty remained because of concerns over a slowdown in growth caused by the impact of US tariff policies and unstable international conditions.」

「During the current consolidated fiscal year, the deterioration of security in the Red Sea resulting from heightened tensions in the Middle East led to vessels avoiding passage through the Suez Canal, causing impacts on the supply chain for the Company's products, including transportation and sales. Higher ocean freight rates resulting from rerouting also had a negative impact on profit, among other effects,」

「Although the global economy was on a gradual recovery path during the current fiscal year, core inflation remained high, the pace of recovery varied by region and country, and central banks and governments continued to maintain cautious monetary policies. Geopolitical risks also remained a major concern, and the situation was unpredictable.」

「The deterioration of security in the Red Sea resulting from heightened tensions in the Middle East led to vessels avoiding passage through the Suez Canal, causing impacts on the supply chain for the Company's products, including transportation and sales. In addition, higher ocean freight rates resulting from rerouting had a negative impact on profit, making it an urgent priority to address geopolitical risks.」

「The global economy remained generally uncertain during the current fiscal year amid continued high inflation and the effects of monetary policies implemented by central banks and governments. In North America, the economy remained firm, led by personal consumption. In Europe, economic stagnation continued against the backdrop of the prolonged invasion of Ukraine.」

「During the current fiscal year, the global economy experienced a marked slowdown in Europe, the United States, Asia and Oceania, excluding some countries such as Japan and India, because of continued high inflation originating from Russia's invasion of Ukraine and the effects of monetary policies implemented by central banks and governments.」

「The global economy remained in a challenging condition as product supply shortages and higher costs caused by difficulties in procuring components and raw materials continued, historical inflation caused by soaring energy and food prices following the Russia-Ukraine conflict persisted, and growth gradually slowed under the effects of rapid rate hikes in Europe and the United States and the disruption accompanying China's zero-COVID policy and its lifting.」

「The global economy remained in a challenging condition as product supply shortages and substantial cost increases caused by difficulties in procuring components and raw materials continued, historical inflation caused by soaring energy and food prices following Russia's invasion of Ukraine persisted, and economic growth slowed as European and US countries rapidly raised interest rates. In Japan, although the economy gradually showed signs of recovery, uncertainty about the outlook increased because of rising inflation and the rapid depreciation of the yen, and unpredictable conditions continued.」

「Current-period revenue was affected not only by component and raw-material shortages and longer transportation lead times, but also by lower sales in Europe resulting from the Russia-Ukraine conflict and negative impacts on production and sales from China's lockdowns,」

「During the current consolidated fiscal year, in addition to the outbreak of the Russia-Ukraine conflict, lockdowns in China accompanying the spread of COVID-19 caused impacts on the supply chain for the Company's products, including the procurement of raw materials, production, transportation and sales. Addressing geopolitical risks has therefore become an urgent priority.」

「Sales in all regions exceeded the same period of the previous year, partly because of the positive effect of yen depreciation.」

「Sales in all regions exceeded the same period of the previous year, partly because of the positive effect of yen depreciation.」

「Overseas markets account for approximately 70% of the Group's revenue, and the Group intends to continue increasing the overseas proportion of revenue. In production, industrial inkjet printers and inks are already manufactured at plants in Asia (China and Taiwan) and Europe (the Netherlands, Italy and Lithuania), and the Group intends to continue increasing its overseas production sites.」

「However, from the latter half of the third quarter, infections began spreading again worldwide, and economic activity showed signs of stagnation as governments tightened restrictions, including stay-at-home measures. Uncertainty about the economic outlook therefore remains, and unpredictable conditions continue.」

「However, as the timing of the containment of the spread of COVID-19 remains unforeseeable, uncertainty about the economic outlook has not been dispelled, and unpredictable conditions continue.」

「As governments strengthened measures to address the rapid global spread of COVID-19, the substantial contraction in economic activity resulted in an unprecedented economic downturn. The Group's revenue was significantly affected by customers restraining capital investment and the sharp decline in demand for printing, among other factors.」

「Although the fourth round of additional tariffs in the US-China trade dispute was postponed, a fundamental resolution of the underlying issues is expected to take a long time. The UK's departure from the EU moved one step forward after the withdrawal agreement was put to a vote in Parliament, but many issues remain. In addition, escalating tensions between the United States and Iran have become the greatest global risk factor, raising concerns over military intervention and soaring energy prices.」

「During the six months ended the second quarter of the current consolidated fiscal year, the global economy remained uncertain. US-China trade friction appeared likely to become protracted, causing concern and disruption not only in the countries involved but throughout global supply chains, while the confusion surrounding the UK's departure from the EU and escalating tensions between the United States and Iran reduced investment sentiment and worsened business sentiment globally. The Japanese economy also remained less than optimistic, with many concerns present in the political sphere following the implementation of the consumption tax increase and in markets amid concerns over yen appreciation, in addition to the worsening labor shortage.」

「During the three months ended the first quarter of the current consolidated fiscal year, the global economy remained uncertain. US-China trade friction caused concern and disruption not only in the countries involved but throughout global supply chains, while the confusion surrounding the UK's departure from the EU and escalating tensions between the United States and Iran reduced investment sentiment and worsened business sentiment globally. The Japanese economy also remained less than optimistic, with many concerns present in the political sphere ahead of the consumption tax increase and in markets amid concerns over yen appreciation, in addition to the worsening labor shortage.」

「During the nine months ended the third quarter of the current consolidated fiscal year, the global economy remained generally firm through the second quarter, but from the third quarter onward various negative factors emerged, including uncertainty over US policy and monetary policy and an economic slowdown in China, and unstable conditions continued. The Japanese economy also contained factors of concern, including the worsening labor shortage, political uncertainty ahead of the consumption tax increase and market concerns over yen appreciation, and, like the global economy, could not be viewed with optimism.」

「However, many concerns remain, including US-China trade friction and the impact of US interest-rate policy on emerging-market currencies, and unstable conditions continue. The Japanese economy also cannot be viewed with optimism, like the global economy, because of factors including the worsening labor shortage and concerns that the United States may introduce an exchange-rate clause.」

「During the three months ended the first quarter of the current consolidated fiscal year, the global economy generally remained firm, partly owing to the holding of the US-North Korea summit. However, the outlook remains less than optimistic because of factors including US-China friction over trade policy. The Japanese economy is also expected to continue expanding, supported by firm domestic and external demand, but, in light of the worsening labor shortage and the effects of US-China trade friction, it cannot be viewed with optimism, like the global economy.」

「During the nine months ended the third quarter of the current consolidated fiscal year, the global economy generally remained strong in both developed and emerging economies, supported by political stability and robust financial markets, although some geopolitical risks continued to simmer. However, the situation cannot necessarily be viewed with optimism because of factors of concern, including the increasing inward orientation of national policies and shifts in monetary easing policies in Europe and the United States.」

「However, many factors of concern remain, including policy differences among major powers over free trade and heightened geopolitical risks in East Asia, and the situation remains unpredictable.」

「However, many factors of concern remain, including differences among major powers over the direction of free trade and heightened geopolitical risks in East Asia, and the situation remains unpredictable.」

「Geopolitical risks in East Asia, the Middle East and Europe show no sign of easing, and unstable conditions continue. In Japan, the period of yen depreciation and rising share prices known as the Trump trade began in December, but its sustainability remains uncertain.」

「The UK's decision to leave the EU in the June 2016 referendum is expected to continue having various effects on the global economy. In Japan, although the increase in the consumption tax rate to 10% was postponed for a further 2.5 years, from October 2019, the yen has appreciated in the foreign exchange market, creating a challenging business environment for manufacturers such as the Company, which have a high proportion of overseas sales.」

「Overseas sales accounted for 74.6% of the Group's consolidated revenue in the current consolidated fiscal year, compared with 76.9% in the previous consolidated fiscal year. We intend to continue actively expanding sales in overseas markets through measures such as launching new products and expanding our sales network,」