Stalled Economic Recovery and Increased Uncertainty over the Outlook Due to Yen Appreciation, US-China Trade Friction and Higher Raw Material Costs

「Japan's economy during the interim accounting period continued to recover moderately, with signs of a pickup in personal consumption, although close attention continued to be paid to the effects of rising prices and the increasingly tense situation in the Middle East. The global economy also continued to recover moderately, but the outlook remained uncertain owing to the emergence of geopolitical risks and volatility in financial and capital markets.」

「The sharp rise in crude oil prices stemming from the situation in Ukraine and Russia and recent developments in the Middle East is expected to affect procurement costs across the board, including raw material prices and labor costs for manufacturing our products, as well as transportation costs.」

「In the United States, financial uncertainty caused by the failures of regional banks has also led to the failure of some retailers amid competition from major mass retailers and online sales.」

「Meanwhile, the impact on the domestic economy of rising prices for materials and services due to the rapid depreciation of the yen and higher crude oil prices has become apparent.」

「Meanwhile, the rapid depreciation of the yen and the prolonged situation in Ukraine affected consumption, including through price increases for imported goods.」

「During the cumulative first-quarter period, Japan's economy showed factors contributing to an uncertain outlook, including higher raw material prices caused by rising crude oil prices, volatility in the financial and capital markets, and downside risks from supply constraints associated with the worsening situation in Ukraine, amid the continuing impact of COVID-19. At the company, the effects of crude oil prices and yen depreciation were directly reflected in procurement costs.」

「During the cumulative second-quarter period, Japan's economy continued to face an uncertain outlook as it remained affected by the spread of COVID-19, including the expansion of areas subject to the state of emergency and priority preventive measures and the extension of those periods.」

「As the existing market gradually contracts due to the declining birth rate, the company faces intense competition from competitors, including major companies. Manufacturing and transportation costs are certain to continue rising, while demands from distributors for price reductions are expected to intensify, putting pressure on margins from both sides.」

「During the third-quarter cumulative period, Japan's economic activity was recovering, particularly in domestic travel and dining, but the outlook remained uncertain amid concerns about a resurgence of COVID-19 infections.」

「During the second-quarter cumulative period, the operating environment surrounding the Group suffered a serious blow to people's daily lives and corporate activities as COVID-19 spread. Although the state of emergency declared in Japan in April was lifted in May and economic activity resumed, the outlook remained uncertain, as there was no clear end to the spread of the infection.」

「During the first-quarter cumulative period, the operating environment surrounding the Group was significantly affected by the impact of COVID-19 on manufacturing and consumption in Japan and overseas.」

「During the consolidated fiscal year, the domestic economy was reported to be recovering moderately, but external demand remained weak against a backdrop of a slowdown in overseas economies, while the outlook for personal consumption in Japan following the consumption tax increase also remained uncertain.」

「During the second quarter of the 43rd fiscal period, personal consumption increased due in part to the extended holiday associated with the imperial era change, while announcements of deteriorating corporate earnings for the April-June period, attributed to the downturn caused by US-China trade friction, followed one after another, further increasing uncertainty surrounding the domestic economy.」

「During the first quarter of the 43rd fiscal period, Japan's economy remained extremely uncertain, with resilient consumption alongside signs of an economic downturn, partly reflecting US-China trade friction and a slowdown in the Chinese economy.」

「During the consolidated fiscal year, the economic environment was characterized by uncertainty over the recovery in domestic demand, as trade friction and summer disasters cast a shadow over moderate growth.」

「During the third quarter of the period, Japan's economy emerged from a pause and showed moderate growth, but the intense summer heat, including during the August summer sales season, and trade friction cast a shadow, and the economy continued to fall short of a robust recovery.」

「During the 42nd fiscal period, although an economic recovery was seen in the first quarter, the yen's appreciation and the intensification of US-China trade friction, followed by higher raw material costs in the second quarter, raised concerns that the economic recovery would stall amid an uncertain outlook.」