Interest Rate, Foreign Exchange and Commodity Market Fluctuation Risk
First written in FY2018. 7 of 10 entries say "Worsened", first in FY2023-Q2. Latest entry: FY2026.
Sumitomo Corporation (Sumitomo Shoji Kaisha,Ltd.) moved to the "Worse" side of this theme in 2022, 4 years after the typical company in this theme (2018).
The whole theme swung hardest in 2022: 4 of 6 companies on the "Worse" side.
1 other company's latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「Future risk factors include a prolonged effective blockade of the Strait of Hormuz, global inflation through continued unstable supplies and rising prices of mineral fuels, monetary tightening to curb inflation, deterioration in the fiscal positions of countries associated with support for economic activity, and heightened geopolitical risks in Northeast Asia, Southeast Asia, Africa and elsewhere.」
Market volatility risks, including energy and raw material prices, inflation, interest rates and foreign exchange, became even more concrete due to the situation in the Middle East and disruption in the Strait of Hormuz. - FY2025WorsenedAnnual report
「The outlook for the global economy is for growth to slow as uncertainty about the future increases against a backdrop of US tariff measures and households and companies adopt a cautious stance toward economic activity.」
The uncertainty in the market environment was explicitly identified, including geopolitical risks, US tariff measures, anti-ESG and anti-DE&I movements, and instability in commodity markets. - FY2025-H1WorsenedAnnual report
「In market-based product markets, including financial and commodity markets, unstable conditions with a high degree of uncertainty about the outlook continue amid heightened geopolitical risks, including the invasion of Ukraine and escalating tensions in the Israel-Palestine situation.」
The explanation changed from the generally stable market conditions described in the previous period to continued uncertainty and instability in the financial and commodity markets against a backdrop of heightened geopolitical risks. - FY2024-Q3MitigatedAnnual report
「Financial and commodity markets experienced temporary instability due to factors including heightened tensions in the Israel-Palestine situation, but have generally remained stable amid expectations of a shift toward monetary policy easing.」
It was stated that, although the Israel-Palestine situation caused temporary instability, financial and commodity markets remained generally stable against a backdrop of expectations for a shift in monetary policy. - FY2024-Q2WorsenedAnnual report
「Uncertainty over the outlook for international commodity markets is increasing amid heightened tensions in the Israel-Palestine situation.」
In addition to the inflation and monetary tightening environment described through the previous fiscal year, the Company newly specified the increasing uncertainty over the outlook for international commodity markets due to heightened tensions in the Israel-Palestine situation. - FY2024-Q1MitigatedAnnual report
「International commodity markets have remained relatively stable, although prices are still at relatively high levels, as supply chain disruptions have gradually eased and supply and demand have loosened amid a slowdown in the global economy.」
The Company stated that supply chain disruptions were gradually subsiding and commodity prices were stable at high levels amid easing supply and demand. This indicated some improvement in the external environment compared with the sharp price inflation and market volatility seen through the previous fiscal year. - FY2023WorsenedAnnual report
「The global economy during the fiscal year had continued to recover moderately, supported by fiscal, monetary and other policy measures implemented since the COVID-19 pandemic, but slowed against the backdrop of a rapid rise in prices and monetary tightening to contain it. It recorded the highest inflation rate in approximately 40 years, but price increases gradually moderated as many countries and regions implemented monetary tightening to contain inflation.」
The Company described the highest inflation rate in approximately 40 years, monetary tightening and the destabilization of certain financial institutions, making the volatile environment surrounding markets, interest rates and commodity markets more concrete. - FY2023-Q3WorsenedAnnual report
「During the first 3 quarters of the fiscal year, the global economy faced the sharpest rise in prices in approximately 40 years and showed increasingly clear signs of slowing. After restrictions imposed to contain the spread of COVID-19 were eased, demand surged as economic activity resumed, while insufficient production capacity and supply chain bottlenecks tightened overall supply and demand, and the Russia-Ukraine situation also contributed to sharp price increases across a wide range of goods, particularly energy and food. In addition, tight labor supply and demand in the labor market, particularly in services, intensified underlying inflationary pressure through rising wage pressures. Against this backdrop, monetary policy in many countries and regions shifted from easing to tightening, causing real economic growth rates to decline rapidly.」
The Company described the sharpest price inflation in approximately 40 years, supply chain bottlenecks, the shift to monetary tightening and the decline in real economic growth rates, making the deterioration in the external environment surrounding markets and commodity markets more concrete. - FY2023-Q2WorsenedAnnual report
「Markets for financial instruments, foreign exchange and commodities have experienced significant volatility as uncertainty over the outlook has increased due to the Russia-Ukraine situation.」
The Company stated that volatility in financial, foreign exchange and commodity markets had increased against the backdrop of the Russia-Ukraine situation. quantified: false; materialized: true. - FY2018First statedAnnual report
「The Company’s business is exposed to fluctuations in interest rates, foreign exchange rates, commodity prices and share prices. To manage these risks, it uses derivatives including foreign exchange forward contracts, currency swaps and options, interest rate swaps, futures and options, and commodity futures, forwards, swaps and options.」
The Company disclosed market risks and management measures using derivatives. Its sensitivity analysis for the fiscal year indicated that a 1% appreciation of the yen would reduce profit before tax by ¥165 million, while a 1% increase in interest rates would reduce it by ¥11.970 billion.