Economic uncertainty due to the slowdown in emerging-market economies and the UK's EU withdrawal issue

「During the fiscal year, the Japanese economy continued its gradual recovery, supported by firm personal consumption as inbound demand took hold and wages increased. However, energy prices remained elevated because of geopolitical risks, and prices continued to rise amid the weaker yen, leaving companies facing ongoing pressure to manage costs.」

「During the nine months ended 31 December, Japan was experiencing the eighth wave of COVID-19 infections. However, personal consumption, particularly in restaurants and tourism, showed signs of recovery because major activity restrictions were not imposed and restrictions on new entries by foreign nationals were eased. At the same time, prices of consumer goods and other products continued to rise, as did companies' purchase prices and labor costs. The outlook remained uncertain amid sharp exchange-rate fluctuations and higher long-term interest rates following the Bank of Japan's partial revision of its yield curve control (YCC) policy, which widened the permitted range of fluctuations in long-term interest rates.」

「Although the number of new COVID-19 cases remained high, it peaked toward the end of the period. Economic activity also showed signs of returning to pre-pandemic levels as various infection-prevention restrictions were eased. However, the outlook remained uncertain because of the impact of the sharp depreciation of the yen, soaring prices, particularly for consumer goods and food products, and increases in the minimum wage.」

「During the three months ended 30 June, the Japanese economy showed signs of recovery in personal consumption as activity restrictions were eased following the lifting in some regions of priority preventive measures to prevent the spread of COVID-19. However, the outlook remained uncertain because of Russia's military invasion of Ukraine and rising resource and commodity prices resulting from the weaker yen.」

「During the nine months ended 31 December, the Japanese economy was gradually returning to conditions before the spread of the novel coronavirus disease (COVID-19), following the lifting in some regions of requests to shorten restaurant operating hours and other restrictions. However, the outlook remained uncertain because of entry restrictions resulting from the global spread of the Omicron variant, higher oil prices and continuing semiconductor shortages.」

「In addition to restrictions on activity, including the fourth declaration of a state of emergency covering Tokyo, Osaka and other areas in response to the fifth wave of the novel coronavirus disease (COVID-19), manufacturing industries such as automobiles and household appliances were affected by semiconductor shortages. Although some consumption recovered as COVID-19 vaccinations progressed, the outlook remains uncertain.」

「During the six months ended 30 September, the Japanese economy remained uncertain as the spread of the novel coronavirus disease (COVID-19) showed no signs of abating. The recovery in inbound demand was not seen because entry restrictions remained in place, and the deterioration in the employment environment was another factor.」

「In the security services industry, international events such as the Ceremony for the Enthronement of His Majesty the Emperor in 2019, the G20 summit and the Rugby World Cup brought greater attention to security services than before. Although the Tokyo Olympics and Paralympics were postponed, the importance and profile of security services have continued to rise in preparation for the events scheduled for 2021. At the same time, the impact of the novel coronavirus disease (COVID-19) remains a significant concern.」

「During the nine months ended 31 December, the Japanese economy was affected by the damage caused by Typhoon Hagibis and other events on the production side, although the impact of the consumption tax increase was limited by government income-support measures. Overseas, while the US equity market remained at high levels, the US-China trade conflict did not reach a resolution despite agreement on a Phase One deal, and the UK's withdrawal from the EU (Brexit) became certain. The outlook therefore remained uncertain.」

「During the six months ended the second quarter, domestic demand remained resilient against a backdrop of improving income conditions, rush demand ahead of the consumption tax increase and an overall upward trend in inbound tourism, despite prolonged US-China trade friction, a boycott of Japanese products in South Korea and a decline in South Korean visitors to Japan resulting from worsening Japan-South Korea relations.」

「During the three months ended the first quarter, corporate performance remained resilient, supported by solid consumer spending, inbound consumption and public investment, despite the impact of US-China trade friction on exports and production. However, the outlook remained uncertain due to overseas economic uncertainty, including trade issues and a slowdown in the Chinese economy, in addition to rising labor and outsourcing costs amid tight labor conditions.」

「Overseas, the outlook remained uncertain due to intensifying US-China trade friction, a no-deal Brexit, political risks in Europe including Italy's debt problems, and weakening IT demand.」

「During the nine months ended the third quarter, the effects of the natural disasters that occurred successively from June to September subsided, while exports, production activity and inbound consumption recovered, returning the domestic economy to its previous recovery trend. Overseas, however, the outlook remained uncertain due to US-China trade friction and political risks in Europe, including Italy and the UK.」

「During the six months ended the second quarter, domestic production activity was affected across a broad range of sectors by the Northern Osaka Prefecture Earthquake, the Heavy Rain Event of July 2018 and Typhoon No. 21, which occurred between June and September. However, the economy generally remained on track, supported by strong sales of summer goods during the hot weather from July to August and corporate capital investment driven by demand for labor-saving measures to address labor shortages. Overseas, the outlook remained uncertain due to US-China trade friction and financial problems in some emerging markets, including Turkey.」

「During the three months ended the first quarter, the Japanese economy remained firm, supported by strong capital investment for rationalization and labor saving and by inbound consumption. However, the outlook remained uncertain due to increased cost burdens from rising labor costs and gasoline prices, as well as concerns over a further shift toward trade protectionism overseas, including US-China trade friction following the US administration's imposition of trade sanctions on China, despite tensions over North Korea easing.」

「During the nine months ended the third quarter, the Japanese economy continued to improve. Although uncertainty over US policy management, instability in European political developments and the further expansion of geopolitical risks posed by North Korea persisted, domestic capital investment for labor saving, investment related to the Tokyo Olympics and a recovery in inbound consumption contributed to an expansionary phase that became the second-longest in the postwar period, surpassing the Izanagi boom.」

「During the six months ended the second quarter, the Japanese economy continued on a gradual recovery path. Although political risks in Europe and the US and growing risks related to North Korea left uncertainty over the outlook for overseas conditions, personal consumption and corporate capital investment showed signs of recovery against a backdrop of improving corporate earnings and employment conditions.」

「During the three months ended the first quarter, the Japanese economy maintained strong corporate earnings, supported by growth in the global economy, led by the US and China, and continuing economic measures. At the same time, concerns over fiscal policy and the social security system resulting from future population decline and the declining birthrate and aging population continued to make consumers cautious.」

「The election of Donald Trump as US president raised expectations for large-scale policy investment and further economic expansion, but uncertainty surrounding overseas economies, including the feasibility of the president's policies, left the outlook uncertain.」

「During the nine months ended the third quarter, the Japanese economy saw expectations for further recovery increase as the yen weakened and share prices rose at a faster pace, supported by the resilience of the US economy, a gradual recovery in emerging-market economies and expectations for economic policies following the US presidential election. At the same time, concerns over protectionism in the US left the outlook uncertain.」

「Economic conditions in China and other emerging Asian economies and resource-rich countries weakened, while the increasing uncertainty surrounding overseas economies, including the UK's EU withdrawal issue, and unstable movements in equity and foreign-exchange markets left the economic outlook uncertain.」

「Against a backdrop of unstable movements in equity and foreign-exchange markets caused by concerns over a slowdown in emerging-market economies and the UK's EU withdrawal issue, the outlook for the economy remained uncertain.」