Uncertainty about the outlook due to yen appreciation, economic slowdowns in emerging markets, and U.S. monetary policy

「US trade policy, developments in the Middle East and trends in long-term interest rates continue to pose downside risks to the economy. In the global economy, US personal consumption and IT-related investment driven by AI demand supported economic activity, but prices rose in Europe and domestic demand remained weak in China. Uncertainty surrounding the situation in the Middle East, resource prices and monetary policy continues.」

「一方、世界経済は、米国では個人消費およびAI需要を背景とするIT関連投資が景気を下支えしたものの、欧州では物価が上昇、中国では内需が低迷し、中東情勢、資源価格および金融政策を巡る不透明感は継続しています。」

「In the global economy, the United States maintained steady growth supported by solid domestic demand, although concerns emerged over the impact of policy changes by the new administration. Europe moved toward a gradual recovery as inflation eased, while difficult conditions continued in China due in part to the stagnant property market. Uncertainty over the outlook for the global situation therefore remained.」

「In the United States, steady growth was maintained against a backdrop of solid domestic demand, although concerns arose over the impact of policy changes under the new administration. In Europe, the economy began a gradual recovery as inflation eased, while difficult conditions continued in China because of stagnation in the real estate market and other factors. Uncertainty over the outlook for global conditions therefore remained.」

「The global economy maintained solid growth even after April, when US tariff policies were fully implemented. However, growth in the US economy slowed as personal consumption showed signs of weakening, Germany and Italy recorded negative growth in Europe, and the downturn in China's manufacturing and property sectors continued. The outlook therefore remains uncertain.」

「Although there is considerable uncertainty over the policies of the new US administration, Japan's wage growth in 2025 is expected to settle at a high rate, following the strong increases recorded in 2023 and 2024.」

「In the global economy, inflation in Europe continued to moderate, and in June the European Central Bank cut interest rates for the first time in 4 years and 9 months. In the United States, personal consumption remained solid, but wage growth slowed and the unemployment rate began to trend upward, indicating that consumers were becoming more inclined to save.」

「The global economy continues to face numerous risk factors, including monetary tightening in major countries and geopolitical risks.」

「During the 9-month period ended in the third quarter, Japan's real GDP for the July-September quarter fell 2.9% on an annualized basis, resulting in negative growth for the first time in 4 quarters. The consumer price index rose 2.9% year on year in October, while declining personal consumption slowed the pace of economic recovery. In the global economy, US real GDP growth remained positive for the fifth consecutive quarter in the July-September period, although concerns including persistently high inflation continued. Europe also remained in an economic slump following interest-rate increases through September, while China's property downturn continued for a prolonged period. The outlook therefore remains uncertain.」

「Personal consumption recorded negative growth for the first time in 3 quarters. The consumer price index rose in the 3% range year on year for 12 consecutive months through August, with rising prices weighing on consumption. In the global economy, high inflation persisted in Europe, while the pace of China's economic recovery slowed due in part to the property downturn. The outlook therefore remains uncertain.」

「In the global economy, numerous risk factors are present, including the prolonged Russia-Ukraine war and rising interest rates resulting from monetary tightening in major countries. In Japan, real wages continue to decline as consumer prices rise, particularly for essential goods such as food, making the outlook for the domestic economy extremely uncertain.」

「In the global economy, concerns are growing over an economic slowdown resulting from the prolonged conflict in Ukraine and monetary tightening to counter rising prices. In Japan, concerns are also growing that higher consumer prices will reduce real wages and worsen consumer sentiment.」

「During the 9-month period ended in the third quarter, Japan's real GDP for the July-September quarter fell 0.8% on an annualized basis, resulting in negative growth for the first time in 4 quarters due in part to sluggish personal consumption. The consumer price index rose 3.6% year on year in October, the highest rate of inflation in 40 years due to higher energy and food prices. In the global economy, consumer prices continued to rise sharply in the United States and the euro area as the Russia-Ukraine war dragged on, and recession risks increased across countries. The outlook for the domestic economy therefore remains uncertain.」

「In the global economy, consumer prices continued to rise sharply in the United States and the euro area as the Russia-Ukraine war dragged on, while China's economic growth slowed under its zero-COVID policy. As recession risks increased across countries, the outlook for the domestic economy became extremely uncertain.」

「In the global economy, the progress made mainly by the United States and European countries in balancing pandemic control with economic activity caused a global supply shortage, sending resource and material prices sharply higher and prolonging inflation. In addition, an escalation of the conflict in eastern Ukraine could have a significant impact on food and energy supplies, making the economic outlook extremely uncertain.」

「Various factors putting pressure on corporate earnings, including soaring crude oil and raw material prices and the yen's depreciation, have emerged, and the outlook for normalization of the domestic economy remains uncertain.」

「However, the fourth state of emergency was declared in July, the Tokyo Olympics failed to generate sufficient consumer spending, and infections with coronavirus variants were increasing rapidly. As a result, the outlook for the normalization of domestic economic activity became even more uncertain.」

「During the 3-month period ended in the first quarter, Japan's real GDP for the January-March quarter fell 3.9% on an annualized basis, turning negative for the first time in 3 quarters due to the second state of emergency. The third state of emergency was declared in April, causing the economy to stagnate again and the unemployment rate to worsen. Corporate summer bonuses were also expected to decline for the third consecutive year. In addition, Japan's vaccination rollout was slower than those in the United States and Europe, and the outlook for recovery in the domestic economy remained uncertain.」

「During the fiscal year, the Japanese economy recorded negative growth for the first time in 11 years, with real GDP falling 4.8% year on year in calendar 2020 due to the spread of COVID-19. In the global economy, economic activity in China became more active, while the US and European economies had yet to return to pre-pandemic levels. Although vaccination had begun, the outlook for economic recovery was extremely uncertain.」

「During the 9-month period ended in the third quarter, the Japanese economy grew as real GDP for the July-September quarter increased 21.4% on an annualized basis as a result of the government's economic measures, although it remained well below pre-pandemic levels. The November consumer confidence survey showed some signs of recovery in consumer sentiment, but the unemployment rate remained high, winter bonuses at listed companies were substantially lower year on year, and COVID-19 infections were increasing again. Uncertainty over the outlook for economic activity has therefore intensified.」

「Real GDP for the April-June quarter fell 28.1% on an annualized basis, the largest decline in the postwar period. The number of new domestic infections, which had temporarily subsided in May, began to increase again from mid-July. The July Index of Business Conditions showed "deteriorating," indicating a high probability of recession for 12 consecutive months, the longest period on record, while the unemployment rate also continued to trend upward. As a result, uncertainty over the outlook for economic activity has intensified.」

「Although the impact of the infectious disease is expected to gradually subside, it will inevitably take a prolonged period to overcome weak consumption and normalize economic activity, leaving the economic outlook extremely challenging.」

「While the US economy has continued to expand solidly, the global spread of COVID-19 has added to issues including the slowdown in China's economy resulting from the US-China trade dispute and the UK's withdrawal from the EU, making the outlook for the global economy extremely uncertain.」

「Turning to the global economy, the US-China trade dispute, worsening Japan-South Korea relations and the UK's withdrawal from the EU have been prolonged. Depending on how these issues develop, they could adversely affect the domestic economy, and uncertainty over the outlook remains.」

「The March assessment of the underlying economic trend, calculated from the Indexes of Business Conditions, was downgraded to "deteriorating," the first such downgrade in 6 years and 2 months, increasing uncertainty over the economic outlook.」

「The global economy is expected to continue its gradual recovery, driven by solid economic expansion in the United States, but uncertainty over the outlook for the global situation is increasing due to China's slowing economic growth and the UK's withdrawal from the EU.」

「The global economy is expected to continue its gradual recovery, driven by solid economic expansion in the United States. However, the US midterm elections resulted in a divided government, while the prolonged US-China trade friction and the UK's withdrawal from the EU are creating uncertainty over the outlook.」

「The global economy is expected to continue its gradual recovery, driven by solid economic expansion in the United States. However, US-China trade friction and China's excessive debt problem are creating uncertainty over the outlook.」

「The global economy is expected to remain firm for the time being, supported by strong trade and favourable consumer and corporate sentiment. However, the US government's aggressive protectionist trade policies could become a factor slowing the global economy by escalating trade friction worldwide.」

「In the United States, long-term interest rates rose amid concerns over high prices, resulting in a global decline in stock prices and exchange-rate volatility. In Asia, North Korea showed signs of shifting toward conciliatory diplomacy in conjunction with the PyeongChang Olympics, while in Europe, concerns over the weakening influence of UK Prime Minister May became a factor in the Brexit negotiations. Uncertainty over the outlook for the global situation has therefore continued to intensify.」

「Concerns about political uncertainty have spread, and uncertainty about the outlook for global conditions remains elevated.」

「Concerns about political uncertainty have spread, and uncertainty about the outlook for global conditions remains elevated.」

「Political turmoil has emerged in the United States since President Trump took office. Tensions surrounding North Korea and Syria have continued, while terrorist attacks have occurred one after another around the world, particularly in Europe, the Middle East and Africa. Global conditions remain unstable, and uncertainty about the outlook is widespread.」

「Meanwhile, global political and economic conditions, including conflicts in the Middle East and South China Sea, developments on the Korean Peninsula, the United Kingdom’s withdrawal from the EU and the impeachment of the president in neighboring South Korea, have entered a broad period of change, making the outlook extremely difficult to assess.」

「The yen, which had remained on an appreciation trend, has been depreciating rapidly since mid-November, when Donald Trump’s election as the next U.S. president was confirmed. Meanwhile, the slowdown in economic growth in emerging markets, particularly China, has continued, and numerous factors are causing volatility in the underlying economic trend, making the outlook entirely unpredictable. In addition to conflicts in the Middle East and South China Sea, developments on the Korean Peninsula and the United Kingdom’s withdrawal from the EU, the impeachment of the South Korean president was approved. Global political and economic conditions have entered a major period of change, making the outlook extremely difficult to assess.」

「The yen continued to appreciate, putting downward pressure on share prices amid concerns about the performance of export-oriented companies, while some weakness emerged in the economy. In addition to the slowdown in economic growth in emerging markets, particularly China, expectations for further U.S. rate hikes receded, prompting another bout of yen appreciation. Economic conditions have become increasingly unstable, and the outlook remains uncertain.」