Downside risk to the economy from emerging-market slowdowns, lower oil prices and yen appreciation

「However, uncertainty over the outlook has increased further due to developments in US trade policy, stagnation in China’s economy and the lack of visibility over an end to the armed conflict in the Middle East.」

「Meanwhile, uncertainty over U.S. economic policy, inflation accompanying the depreciation of the yen, and the prolonged geopolitical risks related to the situations in Ukraine and the Middle East have left the outlook uncertain.」

「During the interim consolidated accounting period under review, Japan’s economy remained on a gradual recovery path, supported by improvements in employment and income conditions and a recovery in corporate capital investment. However, concerns continued over the impact on economic activity in Japan and overseas from developments in US trade policy, persistently high raw material and resource prices, and rising prices in general, and uncertainty continued.」

「Meanwhile, the outlook is expected to remain uncertain due to persistently high energy and raw material prices caused by the prolonged situation in Ukraine and heightened tensions in the Middle East, as well as the impact of consumers holding back on purchases following repeated price increases for food, daily necessities and other goods.」

「During the cumulative second quarter under review (1 November 2023 to 30 April 2024), Japan’s economy continued to recover gradually overall. However, soaring raw material and energy prices and inflation caused by the weak yen further heightened consumers’ focus on protecting their household finances, and thrift-oriented behavior continued to strengthen. Meanwhile, the reclassification of COVID-19 as a Class 5 disease and the recovery in inbound demand brought economic activity closer to pre-pandemic levels.」

「The business environment became increasingly challenging due to soaring raw material and energy prices, sharp foreign exchange fluctuations and rising prices. These cost increases also spread to labor costs amid a chronic labor shortage, although the economy overall continued to recover gradually.」

「Meanwhile, the outlook for the economy remained uncertain due to soaring raw material and energy prices caused by the prolonged Russian invasion of Ukraine, as well as policy rate hikes in the US and Europe aimed at curbing global inflation.」

「Meanwhile, the outlook for the economy remained uncertain due to soaring raw material and energy prices caused by the prolonged Russian invasion of Ukraine, as well as policy rate hikes in the US and Europe aimed at curbing global inflation.」

「During the cumulative first quarter under review (1 November 2022 to 31 January 2023), restrictions on socioeconomic activity caused by COVID-19 eased as infection-control measures became established and vaccinations spread, and the economy began moving toward normalization. Meanwhile, the outlook remained uncertain as the prolonged situation in Ukraine and the rapid depreciation of the yen intensified upward pressure on prices through higher resource prices.」

「During the fiscal year under review (1 November 2021 to 31 October 2022), Japan’s economy showed signs of recovery as restrictions on economic activity were gradually eased following the establishment of infection-control measures and the wider availability of vaccines. However, uncertainty remained due to the renewed spread of the Omicron variant, soaring raw material and energy prices associated with heightened tensions surrounding Ukraine, and foreign exchange volatility caused by the rapid depreciation of the yen.」

「During the cumulative third quarter under review (1 November 2021 to 31 July 2022), Japan’s economy continued to face uncertainty. While measures to balance infection control and economic activity progressed amid repeated waves of COVID-19 infections and their containment, concerns arose over the impact of lockdowns in major Chinese cities, including Shanghai, and the prolonged situation involving Russia and Ukraine. In addition to soaring resource prices and supply constraints, sharp volatility in foreign exchange and financial and capital markets remained a concern.」

「During the cumulative second quarter under review (1 November 2021 to 30 April 2022), Japan’s economy was progressing toward normalization as priority preventive measures were lifted in March and vaccinations became more widespread, although the end of the pandemic remained unforeseeable and uncertainty continued. The global economy was recovering from the pandemic, but concerns began to emerge over excessive inflationary pressure caused by Russia’s invasion of Ukraine, soaring resource and energy prices, and logistics disruptions, particularly in shipping, leaving significant uncertainty over the outlook.」

「However, uncertainty continued due to a sharp increase in infections caused by the Omicron variant from year-end, deterioration in the supply-demand balance caused by supply chain disruptions, and sharp volatility in financial and capital markets.」

「Looking ahead, economic activity that had stagnated due to COVID-19 is expected to recover gradually as vaccines become more widely available.」

「The spread of COVID-19 remained uncontrolled, with priority preventive measures and a fourth state of emergency declared in some regions, severely restricting socioeconomic activity by industry and region. Although vaccinations had begun in earnest in Japan, infections with highly transmissible variants increased, and concerns also arose over greater infection risks associated with holding the Olympic and Paralympic Games during the summer. The outlook for the economy therefore appeared likely to remain uncertain for an extended period.」

「During the cumulative second quarter under review (1 November 2020 to 30 April 2021), Japan’s economy was expected to recover as vaccinations against COVID-19 began, government policies took effect and China’s economy recovered. However, concerns including the spread of variant strains made it impossible to predict when the pandemic would end, and uncertainty appeared likely to persist for an extended period.」

「During the cumulative first quarter under review (1 November 2020 to 31 January 2021), Japan’s economy showed signs of a gradual recovery, supported by measures to contain COVID-19, including government support for small and medium-sized enterprises and the Go To campaign. However, new cases began rising again toward year-end, and a second state of emergency was declared in 11 prefectures in January 2021, leaving the outlook uncertain.」

「Economic activity is gradually being ramped up following the lifting of the state of emergency, but the recovery has been slow and concerns remain over a second wave of infections.」

「However, uncertainty over the outlook for economic conditions in Japan and overseas has intensified further due to trade issues, conditions in the Middle East and the global spread of the novel coronavirus.」

「Meanwhile, the economy remained uncertain, with concerns over a downturn in the global economy intensifying due to the prolonged US-China trade war and the spread of pneumonia caused by the novel coronavirus.」

「Meanwhile, overseas conditions remain uncertain, owing to concerns over the prolonged US-China trade tensions, weakness in the Chinese and European economies, and unstable movements in foreign exchange markets.」

「Looking ahead, serious concerns over US-China trade tensions, the outlook for China’s economy and volatility in financial markets continued to make it difficult to dispel uncertainty.」

「Meanwhile, uncertainty over the outlook for the global economy continued as a result of US-China trade tensions and the UK’s EU withdrawal issue.」

「Looking ahead, although corporate earnings and employment and income conditions are improving and the economy is on a moderate recovery path against a backdrop of government economic and fiscal policies, the outlook remains uncertain. The rise of protectionist US trade policy is increasing concerns over a contraction in global trade, while the risk of trade friction is growing as tariffs and retaliatory tariffs are imposed.」

「Meanwhile, although uncertainty over the outlook for the global economy continued, including the intensification of US-China trade tensions resulting from higher US tariffs, the US and European economies continued to expand and Asian economies showed signs of improvement, leaving the global economy on a moderate recovery path overall.」

「Overseas economies generally remained on a moderate recovery path. Although concerns remained over the possible end of monetary easing in the United States, the intensification of US-China trade tensions resulting from higher tariffs, and geopolitical risks surrounding the Korean Peninsula, the US and European economies continued to expand and Asian economies showed signs of improvement.」

「During the cumulative first quarter period (1 November 2017 to 31 January 2018), Japan’s economy remained on a recovery path, supported by improving corporate earnings, increased capital investment and better employment conditions resulting from the effects of various government policies. However, uncertainty over the outlook continued because of overseas developments, including US policy and geopolitical risks surrounding North Korea.」

「During the fiscal year, Japan's economy remained on a recovery path overall, with signs of improvement in corporate earnings and employment and income conditions against the backdrop of the government's economic policies and the Bank of Japan's monetary easing. However, uncertainty surrounding overseas developments, including the increasingly tense situation in North Korea and political conditions in Europe, remained persistent, and the outlook continued to be uncertain.」

「During the cumulative third quarter period (1 November 2016 to 31 July 2017), Japan's economy remained on a moderate recovery path, supported by improvements in employment and income conditions against the backdrop of the government's and the Bank of Japan's proactive fiscal, monetary and other economic policies. However, amid increasingly serious geopolitical risks in the Middle East, North Korea and elsewhere and uncertainty surrounding US economic policy, uncertainty about the overall economic outlook, including foreign exchange trends, increased.」

「During the cumulative second quarter period (1 November 2016 to 30 April 2017), Japan's economy remained on a moderate recovery path, supported by improvements in employment and income conditions against the backdrop of the government's and the Bank of Japan's proactive fiscal, monetary and other economic policies. However, amid growing concerns about a rapid shift toward more conservative US economic policies following the inauguration of the Trump administration and increasingly serious geopolitical risks in the Middle East, North Korea and elsewhere, uncertainty about the overall economic outlook, including foreign exchange trends, increased.」

「During the cumulative first quarter period (1 November 2016 to 31 January 2017), Japan's economy remained on a moderate recovery path, supported by improvements in employment and income conditions against the backdrop of the government's and the Bank of Japan's proactive fiscal, monetary and other economic policies. However, uncertainty about the outlook for the economy as a whole, including foreign exchange trends, increased amid concerns about downturns in emerging Asian and resource-rich economies, particularly China, and concerns that US economic policy would rapidly become more conservative following the inauguration of the Trump administration.」

「In addition, the economy continued to lack visibility amid various downside risks, including concerns over economic downturns in emerging Asian economies, particularly China, and resource-based economies, geopolitical risks and the outcome of the referendum on the UK's withdrawal from the EU.」