Economic slowdown and declining transportation demand due to the spread of COVID-19

「During the first nine months of the current fiscal year, Japan's economy showed a gradual recovery as economic activity normalized following the reclassification of COVID-19 to Category 5. However, uncertainty over the outlook persisted due to persistently high energy prices and soaring resource and material prices associated with the prolonged situation in Ukraine and worsening conditions in the Middle East.」

「During the cumulative second quarter of the current consolidated fiscal year, the Japanese economy was gradually returning to normal economic activity as COVID-19 was reclassified from Category 2 to Category 5 and restrictions on activity were lifted.」

「The economy showed signs of recovery, including a rebound in personal consumption and capital investment, following the reclassification of COVID-19 under the legal framework as a Category 5 disease. However, the economic outlook remained uncertain as high energy prices and soaring resource and materials prices spread to higher prices across a wide range of goods and services.」

「During the cumulative third quarter of the current consolidated fiscal year, with the impact of COVID-19 continuing for an extended period, moves toward normalizing socioeconomic activity were seen as restrictions on activity were lifted and vaccines became more widely available. However, there were still no signs that the spread of the infection was subsiding,」

「During the cumulative second quarter of the current consolidated fiscal year, as the number of infections increased due to the seventh wave of COVID-19, measures aimed at economic recovery, including easing restrictions on economic and social activity and various subsidies, were implemented, and signs of a recovery from the impact of the infection began to emerge.」

「Although measures aimed at economic recovery, such as easing border controls based on trends in COVID-19 case numbers, are expected,」

「During the first nine months of the current fiscal year, Japan's economy had begun to recover gradually as COVID-19 vaccinations progressed, the number of new infections fell sharply, and the state of emergency and priority preventive measures were lifted in October. However, the outlook for the domestic economy remained uncertain as the Omicron variant, which is highly transmissible, spread rapidly in Japan, leading to the reintroduction of priority preventive measures in various areas, in addition to the impact of the semiconductor shortage on industries and soaring resource prices, including crude oil.」

「During the first six months of the current fiscal year, the global spread of COVID-19, which began last year, continued to rage, severely affecting people's lives, employment and corporate activity through measures such as requests to refrain from going out. Economic and consumer activity remained in an extremely challenging condition.」

「During the cumulative first quarter of the current consolidated fiscal year, the Japanese economy remained generally severe, as the spread of COVID-19 continued to require close monitoring, including the temporary issuance of a state of emergency in 10 prefectures as a countermeasure against infections.」

「Economic activity as a whole stagnated significantly due to the issuance of the state of emergency twice and requests by local governments to refrain from going out. In addition, the spread of variant strains meant that the timing of containment remained unforeseeable and conditions remained uncertain.」

「Although economic activity resumed after the lifting of the state of emergency and economic stimulus measures such as Go To Travel had a positive effect, the path to economic recovery remained unclear as the infection spread again, and conditions remained uncertain.」

「Cargo volumes declined year on year because transportation demand remained sluggish from July onward due to the spread of COVID-19.」

「During the first quarter of the current fiscal year, Japan's economy rapidly deteriorated as requests to refrain from going out and traveling to prevent the spread of COVID-19 caused economic activity to stagnate, while corporate earnings and employment conditions deteriorated. At the same time, the global economy also deteriorated, and uncertainty over the outlook persisted.」

「The business environment surrounding the Group is becoming increasingly challenging. In addition to deteriorating domestic economic conditions due to the overseas economic slowdown and the consumption tax increase, economic activity in Japan is beginning to stagnate as the global spread of COVID-19 leads to voluntary suspension of business activities and the shutdown of production lines.」