Demand fluctuations resulting from changes in economic conditions in Japan and overseas

「当第１四半期連結累計期間における世界経済は、中東情勢の緊迫化や地政学リスクの高まりに加え、各国で続く保護主義的な通商政策の影響により、先行きが不透明な状況で推移しました。」

「During the current fiscal year, the global economy achieved uneven growth by region while remaining affected by continuing geopolitical tensions and the monetary policies of individual countries. In the United States, investment related to generative AI and expansion in the high-tech sector supported corporate earnings, while employment and personal consumption remained firm. Inflation, meanwhile, eased gradually, and monetary policy shifted toward gradual rate cuts. In China, although some areas showed signs of recovery due to government stimulus measures, adjustments in the property market and weak domestic demand remained ongoing challenges.」

「During the first half of the current fiscal year, the global economy generally remained in a gradual recovery as geopolitical risks and inflation exerted an impact. In the United States, economic growth slowed because of uncertainty over tariff policy, persistently high inflation and the effects of monetary tightening, among other factors, although the labor market remained solid.」

「During the current fiscal year, the global economy generally remained at a low level of growth against the backdrop of US-China tensions, conflicts in Eastern Europe and the Middle East, and currency fluctuations associated with monetary policy in various countries.」

「During the first half of the current fiscal year, the global economy generally remained on a recovery trend despite challenges varying by region and country. In the United States, the central bank’s rate hikes were halted and inflation eased, while the economy remained stable. In Europe, the recovery became gradually more evident as energy prices began to stabilize and employment conditions and personal consumption improved. In China, foreign investment declined, weakening corporate earnings and the property market, and economic growth slowed, while the government introduced new stimulus measures to expand domestic demand. In Japan, the earnings environment in manufacturing, particularly among export-related companies, remained on a recovery trend.」

「During the nine months ended the third quarter of the current fiscal year, the global economy generally showed increasingly pronounced signs of slowing. In the United States, companies’ willingness to invest declined because of continued monetary tightening, and business sentiment deteriorated, particularly in manufacturing. In Europe, consumer sentiment was recovering as inflationary pressure eased, but corporate earnings remained weak amid the global slowdown and higher costs. In China, the economic slowdown continued because of weak domestic consumption, slowing exports and the property downturn, among other factors.」

「During the six months ended the second quarter of the current fiscal year, the global economy generally saw its recovery slow. In the United States, personal consumption remained firm, but corporate capital investment stagnated amid concerns about financing associated with monetary tightening. In Europe, personal consumption recovered somewhat as real wages rose, but economic activity remained sluggish amid continuing high inflation and rate hikes. In China, the property market deteriorated.」

「During the three months ended the first quarter of the current fiscal year, the global economy generally saw its recovery slow. In Europe and the United States, soaring prices pressured personal consumption, while corporate production and capital investment also showed increasingly pronounced signs of slowing against the backdrop of declining domestic and overseas demand and rising interest rates. In China, domestic consumption remained on a recovery trend after the zero-COVID policy was lifted, but corporate production and exports, particularly of IT-related products, were trending downward. In Japan, inbound demand recovered due to the easing of activity restrictions and the impact of yen depreciation, improving business conditions in the non-manufacturing sector. Meanwhile, the recovery in manufacturing slowed as the slowdown in overseas economies and soaring raw material and energy prices weighed on the earnings environment.」

「During the current fiscal year, the global economy generally saw its recovery lose momentum as activity restrictions related to COVID-19 were eased worldwide. In the United States, employment conditions and personal consumption remained firm, but signs of an economic slowdown intensified as high inflation and policy rate increases weighed on the economy. In Europe, with no improvement in the situation in Ukraine, soaring prices, particularly energy prices, weighed on corporate earnings and personal consumption. In China, consumption had remained sluggish in the first half of the fiscal year against the backdrop of strict activity restrictions under the zero-COVID policy, but the restrictions were lifted in December and economic activity was beginning to normalize.」

「During the nine months ended the third quarter of the current fiscal year, the global economy generally showed weakening recovery momentum. In the United States, signs of an economic slowdown intensified amid continuing high inflation. In Europe, energy prices also soared, exerting downward pressure on corporate earnings and personal consumption. In China, new COVID-19 cases surged following the significant easing of the zero-COVID policy, and business sentiment deteriorated amid continued weak external demand.」

「During the six months ended the second quarter of the current fiscal year, the global economy generally showed weakening economic recovery. In the United States, corporate earnings remained solid and employment and income conditions improved, but rapid inflation exerted downward pressure on the economy. In Europe, with no improvement in the situation in Ukraine, signs of an economic slowdown gradually intensified amid soaring energy prices and rising interest rates. In China, personal consumption remained sluggish because of intermittent activity restrictions under the zero-COVID policy, while economic growth slowed as external demand also lacked momentum.」

「During the three months ended the first quarter of the current fiscal year, the global economy generally remained on a gradual recovery trend. In the United States, corporate employment and production and personal consumption remained firm as interest rates rose gradually to contain inflation. In Europe, higher resource prices and supply chain stagnation associated with the worsening situation in Ukraine weighed on corporate earnings, but business sentiment in the services sector was returning to pre-pandemic levels. In China, the recovery lost momentum because of lockdowns accompanying the renewed spread of COVID-19 infections.」

「Since the beginning of the year, concerns about an economic downturn have intensified as the sixth wave of infections, together with heightened tensions surrounding Ukraine, accelerated higher resource prices and yen depreciation.」

「During the nine months ended the third quarter of the current fiscal year, the global economy generally remained on a recovery trend. In the United States, corporate production continued to improve and personal consumption remained firm. In Europe, however, the spread of the Omicron variant and rising prices pressured consumption, slowing economic growth rates across countries. In China, power shortages were being resolved and corporate earnings were recovering, particularly in export industries. In Japan, the earnings environment improved in both the manufacturing and non-manufacturing sectors, supported by improvements in shortages of parts and raw materials and a recovery in personal consumption following the easing of activity restrictions. However, the Omicron variant spread rapidly in Japan after the beginning of the year, increasing uncertainty about the outlook.」

「During the six months ended the second quarter of the current fiscal year, the global economy generally remained on a recovery trend. In the United States, although new COVID-19 cases showed signs of rising again, corporate production and personal consumption remained firm. In Europe, vaccination progressed smoothly and the economies of individual countries continued to recover steadily. In China, economic growth slowed somewhat due to the government’s measures to curb investment, shortages of materials such as semiconductors, and restrictions on electricity supply from summer onward. In Japan, corporate production and exports were improving against the backdrop of the recovery in overseas economies.」

「During the three months ended the first quarter of the current fiscal year, the global economy generally remained on a recovery trend. As COVID-19 variants spread, vaccination progressed in Europe and the United States, and economic activity began to ease gradually. While this led to a full-fledged recovery in the services sector, manufacturing order intake was also returning to pre-pandemic levels. In China, exports expanded and corporate capital investment continued to increase. In Japan, business conditions in manufacturing improved against the backdrop of the recovery in overseas economies, but services such as accommodation and food services remained difficult, and the recovery in employment and income conditions lagged.」

「During the current fiscal year, the global economy fell sharply in the first half due to the impact of COVID-19, which spread worldwide, but generally remained on a recovery trend in the second half.」

「During the nine months ended the third quarter of the current fiscal year, the global economy generally remained in a difficult situation as the spread of COVID-19 failed to subside. In Europe and the United States, more countries and states introduced lockdowns, causing economic activity to stagnate sharply. In China, the spread of infections was subsiding, and corporate production and exports, as well as personal consumption, were on a recovery trend. In Japan, the number of new COVID-19 cases rose sharply toward year-end. Against the backdrop of uncertainty about the outlook, companies generally remained cautious about capital investment.」

「During the six months ended the second quarter of the current fiscal year, the global economy generally remained in a difficult situation due to the impact of COVID-19. In Europe and the United States, restrictions on movement and corporate operations continued, causing consumption and capital investment to stagnate. In China, meanwhile, the spread of infections began to subside, and business sentiment improved in both the manufacturing and non-manufacturing sectors.」

「During the three months ended the first quarter of the current fiscal year, the global economy slowed sharply as COVID-19 infections spread. In Europe, the United States and China, restrictions on movement and business operations were imposed, and the resulting stagnation in economic activity caused GDP growth rates to fall sharply into negative territory. In Japan, personal consumption fell significantly following requests to refrain from going out and to suspend business operations under the state of emergency. Corporate earnings deteriorated sharply in both the manufacturing and non-manufacturing sectors because of slowing domestic and overseas demand.」

「The worldwide disruption of logistics and the movement of people, together with the suspension of corporate production activities, could cause the negative impact on the global economy to reach a level more severe than the 2009 financial crisis.」

「During the nine months ended the third quarter of the current fiscal year, the global economy generally remained on a slowing trend. In the United States, employment conditions and personal consumption remained firm, but business sentiment deteriorated, particularly in manufacturing. In China, trade negotiations with the United States reached a “Phase One” agreement in December last year, but this did not dispel uncertainty about the outlook, and the recovery from economic stagnation remained gradual. In Europe, as the UK’s withdrawal from the EU became certain, industrial production and manufacturing orders remained weak. In Japan, the slowdown in the economy became more pronounced amid uncertainty in overseas economies, extensive damage caused by typhoons that struck from summer onward, and stagnant consumption following the consumption tax increase.」

「During the six months ended the second quarter of the current fiscal year, the global economy generally showed increasingly pronounced signs of slowing. In the United States and China, exports and imports declined because of trade friction between the two countries, while corporate production and capital investment remained sluggish. In Europe, economic stagnation continued amid rising uncertainty, including weak external demand and concerns about the UK leaving the EU without an agreement. In Japan, exports, particularly to China, lacked momentum, and corporate earnings remained weak.」

「During the three months ended the first quarter of the current fiscal year, the global economy continued to slow. In the United States, employment and consumption conditions improved, but corporate sentiment deteriorated amid concerns about worsening US-China trade friction. The Chinese economy also saw a contraction in trade, and the downward trend in GDP growth continued. In Japan, corporate earnings generally deteriorated, particularly in the manufacturing sector, due to slowing overseas demand.」

「In China, exports to the United States and other countries and regions stagnated, causing corporate earnings to deteriorate and economic growth to slow. The European economy also became increasingly stagnant against the backdrop of the US-China trade dispute, the slowdown in the Chinese economy, and political and economic disruption associated with the UK’s withdrawal from the EU, among other factors.」

「During the nine months ended the third quarter of the current fiscal year, the global economy generally remained on a recovery track, but the recovery lost momentum. In the United States, employment conditions and personal consumption remained strong, supported by solid corporate earnings. In Europe, political uncertainty increased in some major countries, as the UK’s withdrawal from the EU was rejected by the House of Commons and large-scale demonstrations were held in France to protest President Macron’s policies, among other developments. As a result, the eurozone economy entered a sharper slowdown. In China, exports lacked momentum against the backdrop of trade friction with the United States, and economic stagnation continued. In Japan, the impact of the natural disasters that occurred from summer onward subsided, and employment conditions and personal consumption remained on a recovery trend. However, corporate capital investment has weakened amid stagnation in external demand, and uncertainty about the outlook is increasing.」

「In China, uncertainty increased against the backdrop of trade friction with the United States. Although government support, including tax cuts, was provided, the pace of economic expansion continued to slow.」

「Events that could lead to a stagnation of the global economy, including protectionist U.S. trade policies and retaliatory measures by trading partners, have emerged, and uncertainty about the outlook continues unabated.」

「Accordingly, significant fluctuations in the economic conditions of countries and regions in Japan, Asia, Europe, and the United States, which are major markets for our Group, could affect the operating results and financial condition of our Group.」

「The global economy is generally on a moderate expansion trend, but the new U.S. administration has adopted an "America First" policy, and changes are expected in the future trade environment surrounding the United States. In Europe, amid the United Kingdom's withdrawal from the EU and immigration issues, concern remains over the outcome of elections scheduled in European countries in 2017. Regional conflicts also continue in resource-rich countries in the Middle East, and the outlook for the global economy includes persistent sources of instability.」

「However, the Chinese economy continued to slow, while the economies of emerging countries in Asia remained at low growth levels.」

「Demand for the products and services of our Group is affected by the economic conditions in the countries or regions where those products and services are provided.」