Overseas Economic and Foreign-Exchange Uncertainty and Stagnant Personal Consumption

「At the same time, there are concerns that rising awareness of the need to protect household finances amid higher prices may affect consumer sentiment. In addition, uncertainty is expected to persist, including regarding energy prices and exchange rates amid rising tensions in the Middle East.」

「At the same time, there are concerns that rising awareness of the need to protect household finances amid higher prices may affect consumer sentiment. In addition, uncertainty is expected to persist, including regarding energy prices and exchange rates amid rising tensions in the Middle East.」

「Meanwhile, rising uncertainty, including the risk of volatility in financial and capital markets due to US tariff policy and the slowdown in China's economy, as well as concerns over domestic price increases, restrained consumer sentiment, and private consumption lacked strength.」

「Meanwhile, uncertainty in the global economy has increased as prolonged conflicts in various parts of the world, US tariff increases, the slowdown in China's economy, and volatility in financial and capital markets have kept conditions uncertain.」

「During the fiscal year, the Japanese economy was expected to recover as the income environment improved and spending by foreign visitors to Japan expanded. However, the operating environment was challenging as unstable weather, including an unusually warm winter, typhoons, and a prolonged heatwave, suppressed foot traffic and demand for seasonal products.」

「However, although the pace is slowing, the upward trend in prices remains unchanged, and factors of concern, including foreign exchange trends, have increased.」

「During the cumulative first quarter of the fiscal year, there were downside factors for the economy, including higher energy prices and shipping costs resulting from a new conflict in the Middle East. However, private consumption remained at a fairly solid level, particularly in the services sector, supported by simultaneous rises in share prices and a weaker yen and by the recovery in inbound demand.」

「However, in addition to the prolonged rise in prices, uncertainty over the outlook has increased due to factors including the economic slowdown in China and domestic and overseas interest rate trends.」

「During the cumulative third quarter of the fiscal year, the transition of COVID-19 to a Class 5 infectious disease supported the normalization of socioeconomic activity, while private consumption continued to expand, particularly in the services sector, as more companies implemented wage increases. However, concerns also include the difficulty of forecasting future prices and the worsening labor shortage.」

「However, factors of concern have increased, including rising raw material prices and labor costs, supply-side constraints such as labor shortages, and unstable financial conditions in Europe and the United States associated with rising interest rates.」

「During the cumulative first quarter of the fiscal year, the impact of COVID-19 on socioeconomic activity became limited and private consumption gradually recovered. However, new risks have emerged, including global inflation caused by soaring energy and raw material prices, rising interest rates, and large fluctuations in foreign exchange rates.」

「Meanwhile, raw material prices and logistics costs have risen across the board as geopolitical and foreign exchange risks have emerged, increasing the factors of concern regarding the outlook.」

「However, in addition to rising raw material prices and logistics costs due to the situation overseas and other factors, and substantial fluctuations in foreign exchange markets, the rapid spread of the so-called seventh wave in Japan has recently kept conditions unpredictable.」

「Private consumption, which had been gradually recovering toward the end of last year, stagnated after the start of the year due to the spread of the Omicron variant, or the so-called sixth wave, but recovered again in March. Although it continued to be affected by COVID-19, the degree of impact was less pronounced than before.」

「As the spread of COVID-19 vaccinations led the number of infections to decline, signs of a gradual recovery in social life and consumer behavior emerged toward year-end, including the lifting of requests for shorter business hours at the end of October. However, the outlook remained uncertain, with variants spreading again from early January.」

「Private consumption is expected to recover gradually as economic activity normalizes with the rising vaccination rate and the lifting of the state of emergency and other measures. However, uncertainty over the outlook is expected to persist, as concerns remain over a renewed spread of infections.」

「During the cumulative third quarter of the fiscal year, the Japanese economy continued to stagnate due to the spread of COVID-19, or the so-called fourth wave. Although the state of emergency declared for 10 prefectures from late April was lifted in late June except in Okinawa Prefecture, most areas shifted to priority preventive measures to prevent the spread of disease, while variant infections have recently been spreading rapidly.」

「During the cumulative second quarter of the fiscal year, the Japanese economy stagnated broadly as COVID-19 infections resurged, prompting a state of emergency to be declared in January for 11 prefectures and metropolitan areas and extended in the Tokyo metropolitan area through 21 March. There is still no clear prospect of the situation coming to an end, and the impact on private consumption and other areas may persist for an extended period.」

「The resurgence of COVID-19 infections, or the so-called third wave, caused economic activity to stagnate broadly, while private consumption remained unrecovered through the year-end shopping season.」

「Although the business environment surrounding the group is expected to move toward economic normalization following thorough measures to prevent COVID-19 infections, there are concerns that the domestic and overseas economic downturn may become prolonged or more severe.」

「During the cumulative third quarter of the fiscal year, the Japanese economy stagnated further due to the declaration of a state of emergency and requests to refrain from going out, among other measures, in response to the spread of COVID-19.」

「In addition to the global economic slowdown stemming from US-China trade friction, demand fell sharply and uncertainty increased as the novel coronavirus spread.」

「However, private consumption remained weak and uncertain, due to the decline in consumer sentiment following the consumption tax rate increase and the effects of the unusually warm winter.」

「Although private consumption has recovered, consumer sentiment remained weak due to the impact of uncertainty in overseas economies, particularly China, uncertainty over the economic outlook following the consumption tax rate increase, and the gradual rise in consumer prices.」

「Although private consumption has begun to recover in line with the gradual economic recovery, consumer sentiment remained weak as consumer prices rose.」

「During the cumulative second quarter of the fiscal year, the Japanese economy remained on a gradual recovery path as employment and income conditions continued to improve. However, consumer sentiment remained weak amid uncertainty in overseas economies and expectations of further price increases.」

「Personal consumption remained weak and consumer sentiment continued to soften, partly due to price increases for daily necessities.」

「The selling season was challenging, partly due to consumers holding back on suit purchases during the Cool Biz season.」

「During the cumulative second quarter of the current consolidated fiscal year, Japan's economy was gradually recovering as the employment and income environment improved. However, amid uncertain conditions overseas, the outlook for the economy remained unclear.」

「The economy was on a gradual recovery path as corporate earnings improved, but consumers' concerns about the future remained strong, and saving-oriented behavior persisted, resulting in unstable conditions.」

「Personal consumption is recovering slowly, while consumers' strong preference for saving remains entrenched.」

「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 employment and income environment was improving, there was still no clear sense that the improvement would be sustained, and consumer sentiment remained unstable.」

「Foreign exchange fluctuations may affect the yen value of assets and liabilities arising from the Company's foreign-currency-denominated transactions. Foreign exchange trends may also affect the prices of products and raw materials traded in foreign currencies.」

「Unstable conditions continued due to uncertainty in overseas economies and foreign exchange trends arising from issues including the UK's withdrawal from the EU. Personal consumption remained broadly flat, as consumers continued to prioritize saving, making it difficult to feel that a recovery was taking hold.」