Constraints on Capital Investment and Research and Development Investment Due to Economic Fluctuations and Price Competition

「Meanwhile, the outlook remained highly uncertain due to a lack of strength in personal consumption amid persistently high prices, as well as economic trends in major countries and foreign exchange market volatility. In addition, uncertainty surrounding corporate management continued due to geopolitical risks, including the impact of protectionist trade policies and tariff increases led by the United States on global supply chains and the global economy, continuing inflationary pressure from elevated raw material and energy prices, and the absence of any easing in tensions in the Middle East, Ukraine and elsewhere.」

「The implementation of tariff policy and protectionist economic security policy by the new US administration could cause a global economic slowdown and inflationary pressure through supply-chain restructuring and higher import costs. The situation therefore continues to require close monitoring as a potential “tariff shock.”」

「The development of tariff policies and protectionist economic-security policies by the new U.S. administration remains a matter requiring close attention, as it could cause a global economic slowdown and inflationary pressure through supply-chain restructuring and higher import costs—a potential “tariff shock.”」

「In addition to the impact of geopolitical risks arising from unstable international conditions, including heightened tensions in the Middle East and the protracted situation in Ukraine, concerns have emerged over a new “tariff shock” caused by the impact of US tariff policy on the global economy.」

「However, global economic growth could fluctuate depending on the policies of the Trump administration under its “America First” agenda. China continues to face problems in its real estate market, while Europe faces political instability. In addition, geopolitical risks arising from unstable international conditions, including the protracted situation in Ukraine and relations with the United States, remain a concern. If greater US protectionism leads to an expansion of trade disputes, trade costs could rise, and the outlook remains difficult to predict.」

「In Japan, the economy has continued to recover moderately, with an increase in domestic and overseas travelers and improvements in employment and income conditions. However, geopolitical risks arising from unstable international conditions, including heightened tensions in the Middle East and the worsening situation in Ukraine, together with a slowdown in the Chinese economy and concerns over a renewed acceleration in global inflation driven by higher raw material prices and energy costs, could lead to weaker consumer activity, prolonged restrictive monetary policy and the risk of further interest-rate hikes. The outlook therefore remains uncertain.」

「In Japan, the economy has continued to recover moderately, with an increase in domestic and overseas travelers and improvements in employment and income conditions. However, geopolitical risks arising from unstable international conditions, including the worsening situation in Ukraine, concerns over a slowdown in the Chinese economy and ongoing global monetary tightening are creating downside risks from a slowdown in overseas economies. The outlook also remains uncertain due to higher raw material prices and energy costs.」

「Capital investment by each company is expected to continue declining from fiscal 2024 onward.」

「COVID-19, which caused a global pandemic, has been reclassified as a Class 5 disease, and efforts to adapt to the post-COVID environment have progressed, with signs of recovery in the economic environment as daily life gradually returns to normal. However, central banks, primarily in Europe and the United States, have continued tightening monetary policy in response to inflation and other factors. Concerns have also arisen regarding confidence in financial institutions in Europe and the United States, and the impact on Japan's capital markets and other areas requires close attention. Although the previously tight demand for semiconductor components had eased somewhat due to the slowdown in the global economy, resource prices remained high as a result of overseas political developments, and the outlook for the domestic economy amid foreign exchange fluctuations remains uncertain.」

「COVID-19, which caused a global pandemic, has been reclassified as a Class 5 disease, and efforts to adapt to the post-COVID environment have progressed, with signs of recovery in the economic environment as daily life gradually returns to normal. However, central banks, primarily in Europe and the United States, have continued tightening monetary policy in response to inflation and other factors. Concerns have also arisen regarding confidence in financial institutions in Europe and the United States, and the impact on Japan's capital markets and other areas requires close attention. Although the previously tight demand for semiconductor components had eased somewhat due to the slowdown in the global economy, resource prices remained high as a result of overseas political developments, and the outlook for the domestic economy amid foreign exchange fluctuations remains uncertain.」

「Although the previously tight demand for semiconductor components had eased somewhat due to the slowdown in the global economy, resource prices remained high as a result of overseas political developments, while disruption to the domestic economy caused by foreign exchange fluctuations continued. The outlook therefore remains uncertain.」

「Although the previously tight demand for semiconductor components had eased somewhat due to the slowdown in the global economy, resource prices remained high as a result of overseas political developments, and recent rapid fluctuations in foreign exchange rates have caused disruption. The outlook therefore remains uncertain.」

「The communications services and communications equipment markets are expected to expand over the medium to long term. In the short term, however, they are expected to remain subject to economic conditions affected by domestic and international political and economic developments and the spread of COVID-19. Intensifying competition in the communications industry is also expected to continue encouraging a selective approach to capital and R&D investment.」

「During the nine-month period of the current third quarter of the fiscal year, corporate performance had been improving as economic activity recovered from the stagnation caused by the global spread of COVID-19. However, the semiconductor-related products sector continued to be affected, and the prolonged impact on procurement of components persisted. In addition to resource price increases caused by political developments overseas, recent rapid fluctuations in foreign exchange rates have caused disruption, leaving the outlook uncertain.」

「The communications services and communications equipment markets are expected to expand over the medium to long term. In the short term, however, they are expected to remain subject to economic conditions affected by domestic and international political and economic developments and the spread of COVID-19. Intensifying competition in the communications industry is also expected to continue encouraging a selective approach to capital and R&D investment.」

「The trend toward lower service prices resulting from competition among communications operators to acquire subscribers has become established. The communications industry as a whole is expected to maintain a selective approach to investment while assessing changes in economic conditions resulting from the spread of COVID-19.」

「During the six-month period ended [the current second quarter], there were no newly arising business or other risks, nor any material changes to the business and other risks described in the Annual Securities Report for the prior fiscal year.」

「During the three-month period ended [the current first quarter], there were no newly arising business or other risks, nor any material changes to the business and other risks described in the Annual Securities Report for the prior fiscal year.」

「During the six-month period ended [the current second quarter], there were no newly arising business or other risks, nor any material changes to the business and other risks described in the Annual Securities Report for the prior fiscal year.」

「During the three-month period ended [the current first quarter], there were no newly arising business or other risks, nor any material changes to the business and other risks described in the Annual Securities Report for the prior fiscal year.」

「During the nine-month period ended [the current third quarter], there were no newly arising business or other risks, nor any material changes to the business and other risks described in the Annual Securities Report for the prior fiscal year.」

「During the six-month period ended [the current second quarter], there were no newly arising business or other risks, nor any material changes to the business and other risks described in the Annual Securities Report for the prior fiscal year.」

「During the three-month period ended [the current first quarter], there were no newly arising business or other risks, nor any material changes to the business and other risks described in the Annual Securities Report for the prior fiscal year.」

「Although the communications services and communications equipment markets are expected to expand over the medium to long term, they are likely to be affected by economic conditions in the short term. Intensifying price competition in the communications industry is also expected to constrain capital investment and R&D investment and to sustain the general downward trend in communications equipment prices.」

「During the nine-month period ended [the current third quarter], there were no newly arising business or other risks, nor any material changes to the business and other risks described in the Annual Securities Report for the prior fiscal year.」

「During the six-month period ended [the current second quarter], there were no newly arising business or other risks, nor any material changes to the business and other risks described in the Annual Securities Report for the prior fiscal year.」

「Although the communications services and communications equipment markets are expected to expand over the medium to long term, they are likely to be affected by economic conditions in the short term. Intensifying price competition in the communications industry is also expected to constrain capital investment and R&D investment and to sustain the general downward trend in communications equipment prices.」