Impact of a Downturn in Overseas Economies and Further Yen Appreciation

「Looking ahead for Japan's economy, the pace of recovery is expected to remain moderate for the time being, particularly on the export side, owing to the impact of trade policies in various countries and other factors. Thereafter, the improvement trend is expected to become clearer, supported by the government's economic measures and accommodative financial conditions. The economies of the countries where our subsidiaries are located, including the US, UK and China, are also expected to improve gradually with policy support and other factors. Thailand is likewise expected to continue improving gradually, supported by global demand related to AI and other factors. However, risk factors include the impact in the US of tariffs on employment and income formation through deterioration in corporate earnings, and on personal consumption through the pass-through of tariff costs to consumer prices. In China, risk factors include adjustment pressures in the real estate and labor markets, as well as the impact on the global economy and prices of excess production capacity in certain goods.」

「The pace of recovery in overseas economies moderated, and some regions showed signs of a pause. In the US, economic expansion moderated, while the economy was affected by a reactionary decline in front-loaded demand associated with higher tariffs and other factors. In China, although various policy measures had an effect, the economy was at a standstill owing to the impact of higher US tariffs, adjustment in the real estate market and other factors.」

「Overseas economies generally recovered gradually. The US economy grew steadily, led by personal consumption, while the European economy bottomed out despite retaining some weakness. ASEAN economies, including Thailand, also improved gradually as exports, particularly of IT-related goods, recovered. In China, although policy measures were currently providing support, the pace of improvement slowed as downward pressure from adjustment in the real estate and labor markets continued. Although a gradual recovery is expected to continue, attention must be paid to uncertainty over US policy, which could affect not only the US economy and price trends but also the global economy.」

「Overseas economies were generally recovering gradually. In the US, the economy was expanding and is expected to continue expanding, but attention must be paid to downside risks to the economy associated with inflation remaining high. In China, supply increased as a result of policy measures, but the economy was at a standstill and is expected to remain so.」

「The pace of recovery in overseas economies slowed. Although the US economy remained firm, led by personal consumption, despite the impact of interest-rate hikes, the European economy continued to slow gradually as the effects of interest-rate hikes and other factors persisted. China's economy continued to slow gradually owing to adjustment in the real estate market and other factors, although some areas, including personal consumption, showed signs of recovery. ASEAN exports were bottoming out as domestic demand continued to improve, but Thailand showed some signs of a pause in its recovery.」

「Although overseas economies generally continued to recover, some regions showed weakness. The US economy remained firm, led by personal consumption, despite the impact of interest-rate hikes, while the pace of recovery in Europe continued to slow gradually as the effects of interest-rate hikes and other factors persisted, and the UK economy was also weak. China's economy continued to slow gradually owing to slowing domestic demand, adjustment in the real estate market and other factors, and the recovery in personal consumption had also stalled. ASEAN economies, including Thailand, were recovering gradually as exports began to bottom out while domestic demand continued to improve.」

「Overseas economies showed a slowdown in the pace of recovery. Although the US economy remained firm, led by personal consumption, despite the impact of interest-rate hikes, the European economy continued to slow gradually as the effects of interest-rate hikes and other factors persisted. The Chinese economy continued to slow gradually owing to slowing external demand, adjustment in the real estate market and other factors, although some areas, including personal consumption, showed signs of recovery. ASEAN economies, including Thailand, were generally recovering as domestic demand continued to improve despite slower exports and moderating inflation.」

「The US economy continued to recover, and further economic recovery is expected, but there are downside risks from the impact of monetary tightening and other factors. The European economy was at a standstill and is expected to remain weak, while depending particularly on developments in Ukraine, downward pressure from rising resource and grain prices could intensify, mainly in the euro area. China's recovery had also stalled, and uncertainty over the pace of future recovery increased amid continued adjustment pressures in the labor and real estate markets.」

「Although some regions showed weakness, overseas economies continued to recover. By region, personal consumption remained firm in the US, but the pace of recovery continued to slow owing to rising prices and continued interest-rate hikes. In Europe, concerns over energy supplies had eased, but the recovery in economic conditions had stalled as the impact of the situation in Ukraine continued. In China, despite continued adjustment in the real estate market, progress toward normalizing economic activity was seen as the impact of infections eased. ASEAN economies, including Thailand, continued to improve gradually, led by domestic demand, despite a decline in exports, particularly of IT-related goods.」

「In overseas economies, the US economy continued to recover gradually, and personal consumption remained firm, but the pace of recovery continued to slow owing to rising prices and continued interest-rate hikes. The Chinese economy had shown weakness recently owing to the impact of the renewed spread of COVID-19 and other factors, but the end of the zero-COVID policy is expected to support continued progress toward economic normalization. The European economy was recovering gradually, but showed signs of a slowdown as the impact of the situation in Ukraine continued. In emerging Asian economies, the reopening of economic activity supported domestic demand, but slowing external demand and other factors posed risks to the pace of recovery.」

「Overseas economies were generally recovering gradually, although signs of a slowdown were seen, particularly in developed economies. The pace of recovery in the US economy slowed somewhat owing to substantial price increases and continued interest-rate hikes. The European economy was also recovering gradually as economic activity reopened, but showed signs of a slowdown as the impact of the situation in Ukraine continued.」

「Looking overseas, the US economy recovered, led by personal consumption, amid the buildup of consumer demand seen to date. The Chinese economy was also beginning to recover from its depressed state as the impact of stringent public health measures introduced in response to the spread of infections eased. The European economy was slowing owing to the impact of rising energy prices and other factors, but was recovering as a trend as economic activity continued to reopen.」

「Although conditions varied by country and region, overseas economies were generally recovering. In China, however, the recovery has stalled in some areas, as economic activity has been restricted in certain regions owing to the renewed spread of COVID-19. The US and European economies were recovering, and this trend is expected to continue.」

「However, close attention must be paid to the impact of the spread of infections, supply-side constraints such as semiconductor shortages, concerns over global inflation caused by rising raw material prices and energy costs, and heightened political, military and social tensions following Russia's invasion of Ukraine.」

「Overseas, economic expansion in the United States continued as vaccination rates rose and large-scale economic policies took effect. In Asia, the recovery in China slowed somewhat, but economies generally continued to recover. In Europe as well, economies were on a recovery trend as restrictions on movement were gradually eased.」

「Overseas, economic activity in the United States continued to normalize as vaccination rates rose and large-scale economic measures took effect, sustaining increases in personal consumption and capital investment. In China as well, the economy was recovering as restrictions on movement were eased following a decline in new infections.」

「During the nine-month period of the current fiscal year, a 3rd state of emergency and priority preventive measures were introduced in April 2021 due to the renewed spread of COVID-19. This restricted the movement of people and caused economic activity to stagnate again, leaving the outlook still uncertain.」

「During the six-month period of the current fiscal year, the economy was gradually recovering, particularly in manufacturing, from the difficult conditions caused by the global spread of COVID-19, supported by the effects of various policies and improvements in overseas economies. However, personal consumption weakened following the declaration of another state of emergency in January 2021, some non-manufacturing industries remained in difficult conditions, and concerns about the spread of infection could not be dispelled as variants of COVID-19 were identified in Japan and overseas, so the outlook remained uncertain.」

「During the three-month period of the current fiscal year, the Japanese economy remained in difficult conditions due to the global spread of COVID-19, but personal consumption and exports showed signs of recovery as a result of the effects of various policies aimed at raising the level of socioeconomic activity and improvements in overseas economies. However, concerns about the impact of a renewed spread of the infection on economic activity remained, and the outlook continued to be uncertain.」

「Overseas, sales in both North America and Europe fell by nearly 30% from the previous year after entering the third quarter, while Asia recovered from the downturn caused by the spread of COVID-19. In particular, sales of superchargers and oil-related products increased in China, resulting in an increase in total overseas sales year on year.」

「During the six-month period of the current fiscal year, the Japanese economy remained weak, particularly in manufacturing, as exports softened, although employment and income conditions continued to improve and the economy was gradually recovering. However, due to the impact of the global spread of COVID-19 on the world economy, difficult conditions are expected to continue going forward.」

「However, in addition to the impact of trends in overseas economies, including tensions over trade issues, the outlook for the Chinese economy and the UK's withdrawal from the EU, and volatility in financial and capital markets, the situation remains one in which close attention must continue to be paid to trends in consumer sentiment following the consumption tax rate increase.」

「However, the economic outlook remains uncertain due to factors including a slowdown in the Chinese economy resulting from prolonged U.S.-China trade tensions, the UK's EU withdrawal issue, uncertainty regarding overseas economic trends and policies, and volatility in financial and capital markets.」

「During the nine-month period of the current fiscal year, the Japanese economy showed a moderate recovery as personal consumption picked up amid continued improvement in employment and income conditions, but the outlook remained uncertain due to factors including the impact of developments in U.S.-China trade tensions on the global economy, a slowdown in the Chinese economy, uncertainty regarding overseas economic trends and policies, and volatility in financial and capital markets.」

「However, the economic outlook remains uncertain due to factors including the impact of developments in U.S.-China trade tensions on the global economy, a slowdown in the Chinese economy, uncertainty regarding overseas economic trends and policies, and volatility in financial and capital markets.」

「However, the situation remains one in which close attention must continue to be paid to the impact of developments in U.S.-China trade tensions on the global economy, uncertainty in overseas economies and volatility in financial and capital markets.」

「However, attention must continue to be paid to the impact of U.S.-China trade tensions on the global economy, uncertainty in overseas economies and volatility in financial and capital markets, and the outlook remains difficult to predict and uncertain.」

「Although overseas economies are on a recovery trend, attention must continue to be paid to the outlook for the economies of emerging Asian countries, including China, and the impact of volatility in financial and capital markets, and the outlook remains difficult to predict and uncertain.」

「However, the outlook remains difficult to predict and uncertain due to factors including heightened tensions in neighboring countries, turmoil and policy gridlock in the U.S. administration, and growing uncertainty in Europe's political environment.」

「However, the outlook remains difficult to predict and uncertain due to factors including heightened tensions in neighboring countries, turmoil and policy gridlock in the U.S. administration, and growing uncertainty in Europe's political environment.」

「Most of the products our Group sells overseas are manufactured in Japan and exported. If the yen appreciates rapidly and substantially, we may lose price competitiveness overseas, creating a risk of an adverse impact on our Group's operating results and financial position.」

「Overseas economies have generally continued their moderate recovery, but the outlook remains uncertain due to political instability in the United States and in the EU, including the United Kingdom.」

「Overseas economies have generally continued their moderate recovery, but uncertainty remains about the outlook, including the policies of the new U.S. administration and the full-scale negotiations over the UK's withdrawal from the EU.」

「Overseas, Donald Trump was elected as the next U.S. president, triggering a substantial depreciation of the yen and having a significant impact on future exports and imports.」

「As the yen appreciated against the end of the previous fiscal year, ordinary profit was ¥436 million, up 25.8% year on year, due in part to the recognition of a ¥72 million foreign exchange loss.」

「Concerns remain about the impact of risks including a downturn in overseas economies, particularly a slowdown in the economies of emerging Asian countries such as China, and the rapid appreciation of the yen, and the outlook remains uncertain.」