Geopolitical Risks from European Politics, the Middle East, North Korea and Other Areas

「During the consolidated fiscal year, Japan's economy showed signs of a gradual recovery, supported by improvements in employment and income conditions. However, uncertainty about the outlook remains due to developments in U.S. trade policy, the effects of domestic and overseas inflation trends and monetary policy, prolonged geopolitical risks typified by the situations in the Middle East and Ukraine, and higher raw material prices and labor costs.」

「During the current interim consolidated accounting period, the economy showed signs of a gradual recovery, supported by improved business sentiment. However, uncertainty about the outlook remains due to developments in US trade policy, inflation trends in Japan and overseas, the effects of monetary policy, prolonged geopolitical risks and higher labor costs.」

「During the current interim consolidated accounting period, inbound demand expanded and corporate capital investment remained solid, putting the economy on a recovery path. However, uncertainty remained, including global geopolitical concerns and higher resource prices and labor costs.」

「During the third quarter of the current consolidated cumulative period, employment conditions improved, but the effects of soaring resource prices and, in part, higher raw material prices caused by the yen's depreciation remained significant, and the economic outlook continued to be uncertain.」

「During the second quarter of the current consolidated cumulative period, inbound demand recovered against the backdrop of the weaker yen, and corporate capital investment driven by digital transformation remained solid. Although the economy was recovering, the outlook remained uncertain amid greater uncertainty, including global geopolitical concerns, higher raw material prices and the effects of global monetary tightening.」

「During the first quarter of the current consolidated cumulative period, personal consumption and corporate capital investment remained solid and the economy was gradually recovering. However, the economic outlook remained uncertain amid greater uncertainty, including global geopolitical concerns, higher raw material prices caused by high crude oil prices and the effects of global monetary tightening.」

「During the third quarter of the current consolidated cumulative period, there were signs of recovery as the effects of COVID-19 gradually eased. However, the impact of soaring resource prices and, in part, higher raw material prices caused by the yen's depreciation remained significant, and the economic outlook continued to be uncertain.」

「During the second quarter of the current consolidated cumulative period, the response to COVID-19 entered a new phase and there were signs of an economic recovery. At the same time, risks including globally higher raw material and energy prices and exchange-rate volatility caused by monetary tightening became apparent, and uncertainty remained.」

「Although restrictions on economic activity caused by COVID-19 were gradually easing, the prolonged situation in Ukraine, higher raw material prices caused by high crude oil prices and the prolonged global semiconductor shortage continued to have a significant impact on economies worldwide. In addition, the rapid depreciation of the yen left the economic outlook uncertain amid substantial uncertainty.」

「During the current consolidated fiscal year, restrictions on economic activity caused by COVID-19 were gradually easing. However, the situation in Ukraine and China's zero-COVID policy further depressed economic activity, while higher crude oil prices drove up raw material prices and the prolonged global semiconductor shortage had a significant impact on economies worldwide. In addition, the rapid depreciation of the yen left the economic outlook uncertain amid substantial uncertainty.」

「In addition, Russia's invasion of Ukraine began in late February, causing geopolitical risks to rise rapidly. The outlook remained increasingly uncertain as the effects of soaring resource prices and shortages of certain raw materials grew further.」

「During the second quarter of the current consolidated cumulative period, there were signs of recovery as the effects of COVID-19 gradually eased. However, concerns about a renewed spread due to the emergence of variants and other factors remained, and the economic outlook continued to be uncertain.」

「During the first quarter of the current consolidated cumulative period, the Japanese economy showed gradual signs of recovery amid the renewed spread of COVID-19, but difficult conditions continued, including deteriorating corporate earnings and business sentiment due to the semiconductor shortage and soaring resource prices. The outlook also remained uncertain against the backdrop of the course of the pandemic overseas.」

「During the current consolidated fiscal year, economic activity in Japan and overseas continued to be significantly restricted by the spread of COVID-19. In addition, the effects of the US-China trade friction, the UK's withdrawal from the EU and the global semiconductor shortage had a significant impact on economies worldwide, leaving the economic outlook uncertain amid greater uncertainty.」

「During the third quarter of the current consolidated cumulative period, economic activity in Japan and overseas continued to be significantly restricted by the spread of COVID-19. Although conditions fluctuated, including the lifting of the state of emergency, consumer sentiment continued to deteriorate and the economic outlook remained uncertain.」

「During the second quarter of the current consolidated cumulative period, there were signs of an economic recovery against the backdrop of the government's economic measures and the Bank of Japan's monetary easing policy. However, consumer sentiment continued to deteriorate because COVID-19 continued to spread with no signs of containment, and the economic outlook remained uncertain.」

「The Group continued to promote its “One Stop Shopping” initiative, its basic management policy, with the aim of expanding the scope of orders and improving profitability, and continued to work on building a new business model. The Group continues to benefit from strong tailwinds, including growing demand for robots for labor-saving investment in production environments where labor shortages are becoming more severe, as well as advances in AI that expand the range of tasks robots can perform. In addition, overseas investment by Japanese manufacturers, which are major customers of the Group, continued to be strong, although trends varied by region. However, the effects of COVID-19 continue to impose many constraints on production and sales activities.」

「However, the outlook remains extremely uncertain due to the rapid global spread of COVID-19.」

「Meanwhile, overseas, the outlook remained uncertain amid numerous factors that could have a significant impact on domestic economic conditions, including the effects of the US-China economic friction and the UK's withdrawal from the EU.」

「During the first quarter of the current consolidated cumulative period, corporate earnings and employment conditions continued to improve, but the outlook remained uncertain against a backdrop of the US-China trade friction and unstable political conditions in Europe.」

「During the current consolidated fiscal year, corporate earnings and employment continued to improve and the economy was on a gradual recovery path. However, amid uncertainty in overseas economies, including the effects of the US-China trade friction and the slowdown of the Chinese economy, the economic outlook remained uncertain.」

「During the third quarter of the current consolidated cumulative period, the effects of the economic slowdowns in the US and China gradually began to reach Japan, and some industries affected by them experienced deteriorating business conditions. However, the effects did not spread across the economy, and many industries continued to perform well, with the economy generally maintaining its expansionary trend.」

「During the second quarter of the current consolidated cumulative period, concerns including the US-China economic friction and the slowdown of the Chinese economy had been raised, but they did not have a material impact on the Japanese economy. As a result, the economy maintained its expansionary trend and generally performed steadily.」

「During the first quarter of the current consolidated cumulative period, the Japanese economy continued to expand steadily as the global economy grew at a healthy pace despite concerns including the US-China trade friction and the rise of US protectionism,」

「2. Business and Other Risks Although Japan's working-age population is expected to decline over the long term, making an expansion of the economic scale difficult, the Asian countries surrounding Japan are expected to continue expanding their economies as their populations grow and GDP per capita rises. Accordingly, overseas investment by manufacturers, particularly in the ASEAN countries, is expected to continue expanding.」

「No new business or other risks arose during the cumulative third quarter under review. In addition, there have been no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「During the first six months of the current consolidated fiscal year, there were no newly arising business or other risks. In addition, there were no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「No new business or other risks arose during the first quarter of the current consolidated cumulative period. There were also no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「Although the fundamentals of the domestic and overseas economies were steadily improving, political risks in Europe and geopolitical risks involving the Middle East, North Korea and other areas remained a concern. The situation was characterized by growing, vague anxiety about future uncertainty.」