Deterioration in Market Conditions Due to the Chinese Economic Slowdown, Natural Disasters and Sluggish Consumption

「Meanwhile, the earnings environment surrounding companies remains uncertain due to resource and energy shortages associated with rising international tensions, including the situation in the Middle East, the impact of exchange rate fluctuations on raw material prices, and the effects of natural disasters.」

「During the consolidated fiscal year under review, Japan's economy remained on a moderate recovery track, supported by a pickup in private consumption accompanying improved employment and income conditions and increased inbound demand, as well as continued solid corporate earnings. Meanwhile, prices have recently been rising, particularly for energy resources, due to heightened tensions in the Middle East and the weakening yen. Concerns about downside risks to the economy have also increased due to the impact of US tariff policies and a decline in visitors to Japan resulting from worsening Japan-China relations, and the economic outlook therefore remains uncertain.」

「Meanwhile, downside risks to the global economy remain a concern due to the prolonged conflicts in the Middle East and Eastern Europe, the impact of additional tariff measures by the US, and the slower recovery of the Chinese economy. Consumer prices also continue to rise as raw material and labour costs soar, leaving the outlook for the economy uncertain.」

「With regard to the economic environment for the next period, the economy is expected to remain on a moderate recovery track, supported by continued growth in inbound demand and further improvement in employment and income conditions. However, the outlook also raises concerns about downside risks to the economy due to sluggish consumer spending accompanying price increases and a slowdown in the global economy resulting from the US policy of raising tariffs.」

「Meanwhile, the economic outlook remains uncertain due to higher prices resulting from global monetary tightening, worsening conditions in the Middle East, the slowdown in the Chinese economy and continued yen depreciation.」

「Meanwhile, the outlook for the economy remains uncertain due to the effects of monetary tightening led by Europe and the United States, conditions in the Middle East and the slowdown in the Chinese economy, as well as higher prices accompanying yen depreciation.」

「Regarding the economic environment in the next fiscal year, economic growth is expected to continue, supported by a recovery in personal consumption and inbound demand. However, further price increases are a concern due to global inflation and persistent yen depreciation, while the prolonged instability of the international situation and weakness in the Chinese economy also raise concerns about an economic downturn, leaving the outlook uncertain.」

「Economic activity has been normalizing as restrictions on activity and border controls were eased, and signs of recovery have been seen mainly in personal consumption, inbound demand and earnings at export-related companies. However, the economy has recently shown signs of stalling. In addition, concerns about economic downside remain due to higher consumer prices resulting from surging raw-material costs caused by unstable international conditions and higher import prices caused by yen depreciation, as well as the global trend toward recession.」

「Meanwhile, the global economy has continued to slow due to monetary tightening in Europe and the United States and weak consumption accompanying deteriorating real-estate market conditions in China, leaving persistent concerns about downside economic risks.」

「During the cumulative first quarter from 1 March 2023 to 31 May 2023, Japan’s economy continued on a gradual recovery path, led by domestic demand such as personal consumption centered on services and corporate capital investment, reflecting regulatory easing aimed at containing the novel coronavirus. However, energy and raw-material prices remained high and the global economy was trending downward against a backdrop of unstable international conditions due to monetary tightening to control inflation and deteriorating U.S.-China relations, creating concerns that economic measures by the government and the Bank of Japan’s monetary policy could weigh on the economy.」

「However, concerns remain that higher prices caused by surging energy and raw-material costs are making consumers more cautious, while overseas economies may weaken against a backdrop of monetary tightening policies in Europe and the United States, leaving the outlook uncertain.」

「However, surging resource prices due to the prolonged situation in Ukraine, higher prices caused by yen depreciation following the widening interest-rate differential between Japan and the United States, and slowing overseas economies amid monetary tightening led by Europe and the United States are weighing on the economy, and the outlook remains uncertain.」

「During the cumulative second quarter from 1 March 2022 to 31 August 2022, Japan’s economy continued to recover gradually as economic and social activity normalized following the easing of restrictions related to the novel coronavirus, with personal consumption also showing signs of recovery. However, the outlook remained uncertain due to higher prices caused by surging energy costs and rapid yen depreciation accompanying the widening interest-rate differential between Japan and the United States, as well as the renewed spread of new coronavirus variants. Depending on these conditions, another economic slowdown was also a concern.」

「The outlook is uncertain due to stagnation in the Chinese economy caused by lockdowns, surging energy and raw-material prices against the backdrop of the situation in Ukraine, and rapid yen depreciation accompanying monetary tightening in Europe and the United States. Depending on these conditions, there are also concerns that the economy could slow again.」

「However, central banks in Europe and the United States have recently shifted toward monetary tightening to combat inflation, causing higher interest rates and a weaker yen. Resource and food prices have also been trending upward due to the worsening situation in Ukraine, raising concerns that the economy could slow again.」

「However, the outlook remains uncertain as to whether the economic recovery will become firmly established, given recent supply shortages of components and raw materials and signs of a new wave of variant-virus infections.」

「However, the spread of variant viruses such as the Delta variant remains a concern in Japan and overseas, and the recovery in consumption from the expected progress in vaccinations may be delayed.」

「The issuance of the third state of emergency again restricted personal consumption, and the domestic economy has remained sluggish over an extended period. Activity restrictions are expected to ease gradually as vaccinations become widespread, but delays in the pace of vaccination and a resurgence of variant viruses are also concerns, and more time is expected to be required before a full-fledged economic recovery begins.」

「During the fiscal year, Japan’s economy showed a temporary recovery from stagnation due to the effects of government economic measures while the spread of the novel coronavirus continued. However, the reissuance of a state of emergency in response to renewed infections has increased concerns about another decline, particularly in personal consumption. The spread of infections is expected to gradually subside as vaccines become widespread, but a considerable amount of time is expected to be required before the economy recovers.」

「During the cumulative third quarter from 1 March 2020 to 30 November 2020, Japan’s economy entered a phase of gradual recovery after a sharp temporary downturn caused by the spread of the novel coronavirus, as efforts to balance infection prevention with economic activity expanded following the lifting of the state of emergency. However, a resurgence of infections, apparently a third wave, has recently occurred, and restrictions on economic activity have intensified, including requests for some industries to suspend operations, creating the possibility that the economy could stagnate. Overseas, China had entered a recovery phase, but infections continued to spread in Europe, the United States and emerging economies, raising concerns that the global economic recovery could be delayed.」

「During the cumulative second quarter from 1 March 2020 to 31 August 2020, Japan’s economy deteriorated sharply as both domestic and external demand fell significantly due to the spread of the novel coronavirus, with real GDP growth recording a substantial decline exceeding that during the Lehman shock. Following the lifting of the state of emergency, economic activity gradually resumed and the economy recently began to recover, led by personal consumption and exports. However, there was still no clear prospect of containing the virus, and the recovery was expected to remain gradual. There were also concerns that the global economic recovery could be delayed as infections continued to spread, particularly in emerging economies.」

「During the cumulative first quarter from 1 March 2020 to 31 May 2020, Japan’s economy saw sharp declines in exports and inbound demand, as well as rapid deterioration in corporate performance and employment conditions, against a backdrop of restrictions on going out in Japan and overseas and requests for companies to suspend operations due to the spread of the novel coronavirus. Although the domestic economy was beginning to emerge from its worst phase following the lifting of the state of emergency, the global economy still had no clear recovery outlook, and further downside risks were a concern if a second or third wave of infections occurred.」

「During the fiscal year, Japan’s economy began to show weakness in domestic demand, including personal consumption and capital investment, which had supported the economy, due to the consumption tax increase and typhoon damage. In addition, exports and inbound demand have recently fallen sharply due to the spread of the novel coronavirus, and the risk of an economic downturn is rising rapidly.」

「During the cumulative third quarter from 1 March 2019 to 30 November 2019, Japan’s economy was on a gradual recovery path as domestic demand, including personal consumption, capital investment and public investment, remained solid. However, the economy has recently shown increasing signs of stagnation due to the consumption tax increase, typhoon damage and a decline in inbound demand accompanying deteriorating Japan-South Korea relations. Corporate performance has also remained weak as exports struggled to grow amid U.S.-China trade friction and the U.K.’s withdrawal from the EU, and the risk of recession is expected to rise further if the conflict becomes more severe.」

「Meanwhile, the effects of the increasingly confused global situation are beginning to weigh on corporate performance and inbound demand, and a further deterioration in conditions is expected to increase the risk of a domestic recession.」

「Exports have struggled to grow amid a slowdown in overseas economies, led by China, while domestic demand has also lacked strength, increasing the risk of recession. In addition, the outlook remains uncertain due to continued U.S.-China trade friction and tensions in the Middle East, raising concerns that a further deterioration could worsen the global economy.」

「During the cumulative third quarter from 1 March 2018 to 30 November 2018, Japan’s economy temporarily slowed due to a series of natural disasters, but exports and inbound demand began to recover. Domestic demand, including capital investment and personal consumption, remained firm against a backdrop of solid corporate earnings and employment conditions, maintaining a gradual recovery path. However, the global economy faced risks of deterioration and an economic downturn due to escalating U.S.-China trade friction and political turmoil in Europe and the United States.」

「During the cumulative second quarter from 1 March 2018 to 31 August 2018, Japan’s economy remained on a recovery path, supported by increased exports accompanying the global recovery and more active capital investment to address labor shortages and improve productivity. Corporate earnings and employment conditions remained solid, but the global economy faced risks of slowing due to escalating trade friction stemming from U.S. protectionist policies and currency crises in emerging economies.」

「During the cumulative first quarter from 1 March 2018 to 31 May 2018, Japan’s economy remained on a gradual recovery path, with corporate earnings and employment conditions also solid. However, against a backdrop of rising trade protectionism led by the United States and geopolitical risks in North Korea and the Middle East, the global economy contained risks of slowing.」

「During the fiscal year, Japan’s economy remained on a gradual recovery path, supported by increased exports accompanying global economic expansion and solid domestic demand, including inbound demand. Corporate earnings and employment conditions improved, but the international situation remained unstable due to the rise of protectionism in Europe and the United States and geopolitical risks in North Korea and the Middle East, increasing uncertainty about the economic outlook.」

「During the cumulative third quarter from 1 March 2017 to 30 November 2017, Japan’s economy remained in an extended expansionary phase, with exports gaining momentum as the global economy expanded and domestic demand, including personal consumption and capital investment, showing signs of recovery. However, consumer prices remained sluggish, and the economic environment was still unstable due to geopolitical risks in North Korea and the Middle East.」

「During the cumulative second quarter, Japan’s economy benefited from the government’s and the Bank of Japan’s economic measures and the recovery of the global economy. Corporate earnings remained solid and employment conditions were improving, but consumer prices continued to struggle to rise, no exit from monetary easing was in sight, and the outlook remained uncertain due to the unstable administration in the United States and growing tensions surrounding North Korea.」

「During the cumulative first quarter from 1 March 2017 to 31 May 2017, Japan’s economy remained in an uncertain outlook despite a continued gradual recovery and signs of improvement in corporate earnings and employment conditions, due to the unstable administration in the United States, political conditions in Europe, and conflicts in the Middle East and East Asia.」

「During the cumulative third quarter of the fiscal year, Japan’s economy remained on a gradual recovery path, supported by the effects of the government’s economic measures and the Bank of Japan’s monetary easing policy, but continued to face uncertainty due to overseas economies, including China, and foreign exchange trends. In the industry, high-function personal-use products continued to expand the market steadily, but a persistently sluggish consumption trend and sharp foreign exchange fluctuations have kept market conditions difficult.」

「During the cumulative second quarter of the fiscal year, Japan’s economy remained uncertain due to the influence of overseas economies, including China, and foreign exchange trends. In the industry, sluggish consumption continued and conditions remained generally weak.」

「Japan’s economy remained generally sluggish, as exports and production were broadly flat due to the slowdown in the Chinese economy and the effects of the Kumamoto Earthquake, while personal consumption also struggled to grow.」