Uncertainty in the operating environment due to yen appreciation, falling stock prices, slowing emerging-market economies and geopolitical issues

「However, the outlook remains uncertain as risks of fluctuations in raw material and energy prices have emerged amid developments in US trade policy and heightened tensions in the Middle East.」

「米国の通商政策動向や中東情勢の緊迫化等に伴う原材料価格・エネルギー価格の変動リスクが顕在化するなど、先行きは依然として不透明な状況となっております。」

「During the interim consolidated accounting period, Japan's economy remained on a recovery trend, supported by improving employment and income conditions, a moderate recovery in personal consumption and firm inbound demand, although the impact of US tariff policies was seen in some areas, mainly among exporters. However, the outlook remains uncertain due to continuing price increases, uncertainty over US tariff policies and the prolonged instability of the international situation.」

「However, the economic outlook remains uncertain due to the impact of uncertainty over future US policies, as well as the prolonged situations in Ukraine and elsewhere, heightened tensions in the Middle East, and the prolonged surge in energy and resource prices.」

「However, the outlook for the economy remains uncertain due to global political instability, including the protracted situation in Ukraine, slowing growth in the Chinese economy, and surging energy resource and raw material prices caused by yen depreciation.」

「Economic recovery has stalled amid rising geopolitical risks, including those related to Ukraine and the Middle East, and the impact of global inflation, which began with supply constraints during the COVID-19 pandemic and has caused prices to rise substantially in Japan. The outlook therefore remains uncertain.」

「During the nine-month period ended the third quarter, Japan's economy maintained its recovery trend as economic activity normalized following the lifting of restrictions related to COVID-19, aided in part by increased inbound demand. However, concerns remain about the continuing impact on the economic environment of prolonged global monetary tightening, China's delayed economic recovery, the protracted invasion of Ukraine, instability in the Middle East, and prolonged surges in resource and energy prices.」

「During the six-month period ended the second quarter, Japan's economy entered a moderate recovery trend as personal consumption and leisure demand remained firm against the backdrop of COVID-19 being reclassified as a Category V disease under the Infectious Diseases Control Law, together with increased inbound demand. However, the outlook remained uncertain due to prolonged inflation. Overseas, the US economy remained firm, supported by recovering personal consumption and improving employment conditions, while Europe's economy remained sluggish amid weak personal consumption due to persistently high inflation and the prolonged situation in Ukraine. China's economy continued to slow due to weak domestic and overseas demand for property development investment, among other factors, and conditions remained unstable.」

「The economy remained on a recovery trend as restrictions on activities aimed at preventing the spread of COVID-19 were lifted and personal consumption and inbound demand recovered. However, the outlook remained uncertain due to inflation, including surging raw material and energy prices.」

「However, as economic activity normalized, historically high inflation emerged in the global economy, prompting many countries and regions, including Europe and the United States, to implement aggressive monetary tightening. In addition, the continuing surge in resource prices due to heightened tensions over Ukraine, together with the yen's depreciation against the backdrop of a widening Japan-US interest-rate differential, has pushed up prices through higher raw material and transportation costs, weighing on the economy.」

「During the six-month period ended the second quarter, Japan's economy was moving toward normalization of economic activity, but the seventh wave of COVID-19 infections, a rapid depreciation of the yen and surging energy prices slowed the pace of economic recovery. Meanwhile, although the global economy made further progress in balancing COVID-19 controls with economic activity, uncertainty about the outlook persisted due to surging resource prices associated with the protracted conflict in Ukraine, policy rate hikes accompanying accelerating inflation in Europe and the United States, and the impact of restrictions on economic activity under China's zero-COVID policy.」

「The slowdown in overseas economies is a downside risk, particularly in Europe, which has a high dependence on Russia for energy, and China, where the continuation of strict government disease-control measures is hindering economic growth, as Russia's invasion of Ukraine becomes protracted. The outlook for the economic recovery has therefore become uncertain.」

「The global economy generally remained on a recovery trend in Europe and the United States, supported by the easing of restrictions on activities related to COVID-19 and economic policies. In China, however, economic activity showed signs of slowing under the zero-COVID policy. Uncertainty about the outlook is increasing amid concerns over prolonged production constraints due to the global semiconductor shortage, surging resource prices and rising geopolitical risks, including Russia's invasion of Ukraine.」

「For railway operators, one of our main customer groups, passenger demand was beginning to recover, including through the return of year-end and New Year demand. However, depending on developments concerning the Omicron variant of the coronavirus, uncertainty about the outlook is expected to persist, and the impact on our orders cannot be avoided, including through revisions to capital investment plans and delays in placing orders.」

「For railway operators, one of our main customer groups, passenger demand was sluggish due to intermittent mobility restrictions, the overlap between the peak summer travel season and an increase in COVID-19 cases, and other factors. Although the lifting of the state of emergency at the end of September has raised expectations for a recovery in passenger demand, the impact on our orders cannot be avoided, including through revisions to capital investment plans and delays in placing orders.」

「As COVID-19 has not subsided, mobility restrictions on going out and other activities have continued due to intermittent declarations of a state of emergency and the application of priority preventive measures, while consumer services have remained sluggish, leaving the outlook uncertain.」

「The railway industry, one of our main customer industries, has also been affected by intermittent mobility restrictions and the entrenchment of the new normal, including remote work, resulting from the spread of COVID-19, as well as the sharp decline in the number of visitors to Japan since last year. Passenger numbers have not yet recovered, leading to substantial losses, while revisions to capital investment plans and delays in placing orders are beginning to take concrete shape.」

「During the nine-month period ended the third quarter, the global economy showed signs of recovery as various measures to contain COVID-19 were eased and business activity resumed. However, the virus also resurged, making the uneven pace of recovery between countries and regions increasingly apparent. China, where domestic infections have largely subsided, was recovering, while the pace of recovery was showing signs of weakening in the United States, where infections continued to spread and various economic measures were being gradually scaled back, and in Europe, where infections were accelerating further in various countries and cities were again being placed under lockdown. The outlook remains uncertain, including due to tensions between the United States and China amid difficulties in forming a new US administration.」

「During the cumulative second quarter of the consolidated fiscal period, stagnation in economic activity continued as the novel coronavirus pandemic spread worldwide. With no clear prospect of containing the virus, the pace of economic recovery remained slow. Prolonged tensions between the US and China over issues such as Hong Kong added to the uncertainty. In Japan, restrictions on travel and consumption under the impact of the pandemic, along with adjustments in employment, wages and capital investment, resulted in an extremely severe economic environment.」

「The spread of the novel coronavirus severely restricted economic and social activity, causing the economy to deteriorate rapidly. The global spread also led to a synchronized worldwide recession. Major governments and central banks implemented large-scale economic measures to prevent further deterioration, but there was no sign that the novel coronavirus outbreak was subsiding, and the environment surrounding companies remained uncertain amid additional risks including intensifying US-China tensions over issues such as Hong Kong.」

「In the second half of the fiscal year, the outlook for the economic impact became difficult to predict due to declining private consumption following the consumption tax increase, deteriorating sentiment caused by natural disasters such as typhoons, US-China trade friction, the UK's withdrawal from the EU, escalating tensions between the US and Iran in the Middle East, and the global spread of the novel coronavirus.」

「During the cumulative third quarter of the consolidated fiscal period, uncertainty remained as US-China trade negotiations moved toward a phase-one agreement and uncertainty regarding the UK's withdrawal from the EU eased, while China's economy slowed, concerns about a global contraction in trade increased, and geopolitical risks in the Middle East grew due to escalating tensions between the US and Iran.」

「During the cumulative second quarter of the consolidated fiscal period, the global economy remained uncertain as prolonged US-China trade friction deepened China's economic slowdown, increased concerns about a global contraction in trade, and was compounded by the increasingly confusing issue of the UK's withdrawal from the EU and geopolitical risks including heightened tensions in the Middle East. Japan's economy recovered moderately, with employment and income conditions and corporate earnings improving and capital investment remaining firm. However, the environment surrounding companies remained uncertain as a serious labor shortage, yen appreciation, the consumption tax increase, Japan-South Korea tensions and large-scale natural disasters such as typhoons significantly affected individuals and corporate activity.」

「During the first quarter, Japan's economy recovered moderately, with employment and income conditions improving and capital investment remaining firm. However, the environment surrounding companies remained uncertain due to a serious labor shortage, yen appreciation, growing concerns about a global contraction in trade resulting from prolonged US-China trade friction, heightened tensions in the Middle East and tensions in Japan-South Korea relations.」

「The environment surrounding companies remained uncertain due to labor shortages, soaring crude oil prices, unstable foreign exchange markets and other factors. The global economic outlook also remained a source of concern as US-China trade friction intensified, China's economic slowdown deepened, concerns about a global contraction in trade increased, and the UK's withdrawal from the EU and volatility in financial and capital markets continued.」

「During the cumulative third quarter of the consolidated fiscal period, the global economy recovered moderately, led by advanced economies. However, US protectionist trade policies deepened US-China trade friction, China's economic slowdown intensified, concerns about a global contraction in trade increased, and the UK's withdrawal from the EU and volatility in financial and capital markets left conditions uncertain.」

「During the cumulative second quarter of the consolidated fiscal period, the global economy recovered moderately, led by advanced economies. In the US, employment conditions improved, private consumption and capital investment increased, and a steady recovery continued. The euro area remained firm and emerging economies also recovered moderately. However, US protectionist trade policies intensified US-China trade friction, China's economic slowdown deepened, concerns about a global contraction in trade increased, and the UK's withdrawal from the EU and geopolitical risks added to the uncertainty.」

「During the first quarter, Japan's economy recovered moderately, with employment and income conditions and corporate earnings improving against the backdrop of the government's and the Bank of Japan's monetary easing policies, and capital investment remaining firm. However, the environment surrounding companies remained uncertain due to the escalating US-China trade friction arising from US protectionist trade policies, growing concerns about a global contraction in trade, soaring crude oil prices and other factors.」

「The global economic outlook remained in a situation where concerns could not yet be dispelled.」

「Japan's economy recovered moderately as employment and income conditions improved, capital investment also recovered, and stock prices rose and the yen weakened. However, private consumption had not recovered sufficiently, and the environment surrounding companies remained uncertain due to a serious labor shortage, soaring crude oil prices, geopolitical risks and other factors.」

「During the cumulative second quarter of the consolidated fiscal period, the global economy recovered moderately overall. Although uncertainty remained regarding the policies of the new US administration and the UK's withdrawal from the EU, the US economy continued to expand moderately, the euro area remained firm, China maintained stable growth supported by public investment, and other emerging economies were also improving.」

「During the first quarter, Japan's economy was recovering moderately, with employment and income conditions improving against the backdrop of the government's economic policies and the Bank of Japan's monetary easing policy. However, the environment surrounding companies remained severe and uncertain due to slowing emerging-market economies including China, policy shifts following the formation of new governments in the US and Europe, and geopolitical risks in the Middle East and on the Korean Peninsula.」

「Political instability in Europe following the UK's withdrawal from the EU, slowing emerging-market economies including China, heightened uncertainty arising from the protectionist policy shift of new US President Trump, and geopolitical risks including Syria and North Korea persisted, leaving the global economic outlook uncertain.」

「During the cumulative third quarter of the consolidated fiscal period, the global economic outlook became increasingly uncertain. Emerging-market economies, including China, slowed, and the UK's withdrawal from the EU and the European debt crisis resurfaced, while the US economy continued to expand moderately. Expectations for the US economy increased after Mr. Trump was chosen as the next president in November of the previous year, although uncertainty surrounding the new administration remained a concern.」

「During the cumulative second quarter of the consolidated fiscal period, the global economy became increasingly uncertain as slowing emerging-market economies, including China, the European debt crisis and the UK's withdrawal from the EU were added to the continuing moderate recovery in the US economy. In Japan, employment and income conditions improved against the backdrop of the government's economic policies and the Bank of Japan's monetary easing policy, but the environment surrounding companies remained severe due to falling stock prices, yen appreciation and the reversal in crude oil prices.」

「From the beginning of the year, falling stock prices, a sharp appreciation of the yen, slowing emerging-market economies including China, terrorism, the Syrian refugee issue and the UK's withdrawal from the EU emerged as issues, and the environment surrounding companies remained severe and uncertain.」