Global economic uncertainty due to Brexit and slowing emerging-market economies, and sluggish capital investment and personal consumption

「During the fiscal year under review, Japan's economy remained firm, particularly in non-manufacturing, as forward-looking capital investment in labor-saving initiatives, digital transformation, and software progressed. Although there was some impact from additional tariffs and other factors, the economy continued on a moderate recovery track, supported by wage increases and resilient domestic demand. Nominal personal consumption increased because of higher prices, but real personal consumption remained sluggish, and the outlook remained uncertain, including because of the situation in the Middle East.」

「During the interim consolidated accounting period under review, the impact on economic activity broadened as US reciprocal tariffs caused export-oriented companies to lose price competitiveness and suffer lower profitability, increasing downward pressure on corporate earnings and capital investment. In addition, chronic labor shortages continued, while corporate bankruptcies, particularly among small businesses, remained high because of rising raw material and energy costs and business closures resulting from the absence of successors.」

「During the interim consolidated accounting period under review, Japan's economy entered a moderate recovery trend as capital investment increased, supported by strong corporate earnings and efforts to address corporate challenges through decarbonisation, digital transformation, and labor-saving initiatives. Exports and inbound consumption also expanded. However, the outlook remained uncertain amid concerns about declining real disposable income as wages failed to keep pace with rising prices and labor shortages caused by a lack of available workers.」

「The Japanese economy during the fiscal year under review was on a gradual recovery trend as social and economic activity normalized following the COVID-19 pandemic, supported by corporate capital investment, expanding inbound demand and recovering personal consumption. However, the outlook remained uncertain due to surging energy prices, lower real disposable income resulting from rising prices and labor shortages caused by a declining working-age population.」

「During the cumulative third quarter under review, Japan's economy entered a moderate recovery trend as daily life moved towards normalisation after COVID-19 was reclassified as a Class 5 infectious disease, supported by recovering personal consumption, corporate capital investment, and expanding inbound demand. However, the outlook remained uncertain because of surging energy prices resulting from the prolonged situation in Ukraine, higher prices caused by the weaker yen, concerns about an economic recession resulting from global monetary tightening, and labor shortages caused by a declining working-age population.」

「During the cumulative second quarter under review, Japan's economy entered a moderate recovery trend as economic activity normalised after COVID-19 was reclassified as a Class 5 infectious disease, with travel, tourism, dining out, and various events resuming and inbound consumption supporting the economy. However, the outlook remained uncertain because of surging resource prices, labor shortages, price increases caused by the weaker yen, and concerns about an economic recession resulting from global monetary tightening.」

「During the cumulative first quarter under review, economic activity moved towards normalisation and the economy entered a moderate recovery trend as the classification of COVID-19 under the Infectious Diseases Act was changed to Class 5. However, prices continued to rise because of surging resource prices and foreign exchange movements, while labor shortages also became more pronounced, leaving the outlook uncertain.」

「During the fiscal year under review, although some social activities remained restricted because of the COVID-19 pandemic, efforts to restore daily life became more active in Japan's economy. However, the outlook remained uncertain as Russia's invasion of Ukraine caused significant increases in the prices of energy, food, and fertilizer. Although efforts to raise wages emerged, disposable income remained sluggish.」

「During the cumulative third quarter under review, Japan's economy showed signs of recovery, particularly in personal consumption, as policy shifted towards normalising the economy after the COVID-19 pandemic. However, the outlook remained uncertain because of continued increases in food and energy prices, labor costs, and logistics costs.」

「During the cumulative second quarter under review, Japan's economy showed signs of recovery in personal consumption and corporate capital investment as economic activity resumed under the government's policy of living with COVID-19 and daily life moved towards normality. However, the outlook remained uncertain amid surging energy prices, a rapid depreciation of the yen, and rising prices.」

「During the cumulative first quarter under review, Japan's economy remained on a recovery track as various restrictions were eased under the policy of living with COVID-19, and personal consumption continued to recover. However, the outlook remained uncertain amid instability, including the prolonged tensions surrounding Ukraine, surging resource prices, and volatility in financial and capital markets.」

「Since January, the outlook has remained uncertain, with surging crude oil prices and volatility in the financial and capital markets amid the rapid spread of new variants and heightened geopolitical risks resulting from Russia's invasion of Ukraine.」

「During the cumulative third quarter under review, Japan's economy remained in a difficult situation under the impact of COVID-19. The Declaration of a State of Emergency and the quasi-emergency measures to prevent the spread of disease were fully lifted on 30 September 2021, and the economy temporarily entered a recovery phase from October. However, concerns about a rapid spread of infections caused by a new variant emerged, and the outlook remained uncertain.」

「During the cumulative second quarter under review, Japan's economy remained in a difficult situation because of the impact of COVID-19. Although economic activity is expected to normalise as vaccinations progress, concerns about a resurgence and prolonged spread of the infection remain, leaving the outlook uncertain.」

「During the cumulative first quarter under review, Japan's economy remained in a difficult situation as the spread of the novel coronavirus showed no sign of subsiding, leaving the outlook uncertain.」

「During the cumulative third quarter under review, social and economic activity showed signs of recovery as people wore masks, avoided the Three Cs and observed social distancing. However, concerns about a renewed spread of the novel coronavirus emerged, and the economic outlook remained uncertain.」

「During the cumulative second quarter under review, Japan's economy remained uncertain, as the outlook continued to be clouded by concerns that the stagnation of economic activity would persist even after the state of emergency was lifted, amid the ongoing global spread of the novel coronavirus.」

「During the cumulative first quarter under review, Japan's economy deteriorated rapidly as economic activity stagnated because people refrained from going out and attending events under the state of emergency declared by the government in response to the spread of the novel coronavirus.」

「In 2020, economic activity was constrained and deteriorated sharply as a result of the global spread of the novel coronavirus, leaving the situation highly uncertain.」

「During the cumulative third quarter under review, Japan's economy was on a moderate recovery track, but uncertainty over the outlook caused by the prolonged US-China trade friction remained, and personal consumption lacked strength following the consumption tax increase.」

「During the cumulative second quarter under review, Japan's economy remained stalled, amid uncertainty over overseas conditions and concerns about a decline in consumption following the consumption tax increase.」

「The Japanese economy during the cumulative first quarter under review remained firm, supported by improvements in employment and income conditions, but uncertainty persisted as the US-China trade war intensified, and personal consumption lacked strength.」

「During the fiscal year under review, Japan's economy remained on a moderate recovery track, although export-oriented industries showed signs of a pause against a backdrop of a downturn in the global economy, as employment and income conditions improved.」

「During the cumulative third quarter under review, Japan's economy was on a moderate recovery track, but uncertainty over the outlook, including the US-China trade friction and natural disasters, remained unresolved, and personal consumption continued to show lacklustre growth.」

「During the cumulative second quarter under review, Japan's economy remained on a moderate recovery track, supported by the government's various economic policies. However, consumer sentiment remained weak, as prices of fresh food rose amid extreme heat and energy prices, including gasoline, trended higher against a backdrop of rising crude oil prices. In addition, business sentiment in the Bank of Japan's Tankan survey remained negative for the third consecutive quarter, while the current business conditions index was also recently negative, reflecting uncertainty in overseas economies, including the impact of US trade policy. The economy has also continued to face downward pressure from the effects of a series of natural disasters and rising labor costs resulting from labor shortages.」

「The Japanese economy during the cumulative first quarter under review remained on a gradual recovery trend, as employment and income conditions improved in response to the Cabinet Office's economic and fiscal policies. Although concerns remained over persistently high energy prices, real wages improved as the surge in fresh food prices abated, and signs of a recovery in household purchasing power emerged.」

「During the consolidated fiscal year, Japan's economy was in a phase of moderate recovery, supported by strength in the global economy. However, real wages remained stagnant due to higher energy prices and surging fresh food prices, making it difficult for households to feel an improvement in purchasing power.」

「The Japanese economy during the consolidated third quarter under review was on a gradual recovery trend, with stock prices remaining in the ¥20,000 range on the back of the government's and the Bank of Japan's economic and monetary policies, despite geopolitical risks in East Asia.」

「Although the yen remained stable on a trend of depreciation and earnings recovered, particularly at export-related companies, concerns about deflation could not be fully dispelled, and domestic investment activity and personal consumption remained broadly flat.」

「The Japanese economy during the cumulative third quarter under review remained in an uncertain environment with an increasingly opaque outlook, due in part to the United Kingdom's announcement of its withdrawal from the EU and the transition to a new administration in the United States.」

「When it became clear in late June that the United Kingdom would leave the EU following a referendum, the Nikkei Stock Average fell sharply. Combined with slower growth in emerging-market economies, concerns about the global economy directly affected capital investment by Japanese companies and personal consumption, and the deflationary mindset was not dispelled.」