Economic Downturn Risk from Overseas Economic Uncertainty and Financial Market Volatility

「The outlook is cautious because concerns remain about uncertainty in procuring energy resources and rising costs caused by escalating tensions in the Middle East.」

「The outlook is generally cautious because uncertainty remains high, including the risk of a slowdown in overseas economies and rising geopolitical risks.」

「The outlook is generally cautious because of downside risks including further U.S. tariff increases, escalating trade friction and a slowdown in overseas economies.」

「Although signs of recovery were seen against the backdrop of recovering semiconductor and automobile demand and robust capital-investment demand, the Japanese economy remained broadly flat as a slowdown in overseas economies and higher costs weighed on it. The outlook is generally cautious because of risks including uncertainty over U.S. trade policy, a further slowdown in overseas economies and higher interest rates.」

「During the interim consolidated fiscal period under review (1 January 2024 to 30 June 2024), sentiment in the materials industries of large-company manufacturing improved, particularly in textiles and petroleum and coal products. Sentiment in processing industries also improved slightly, supported by robust capital-investment demand despite the effects of production stoppages at major automobile manufacturers, resulting in an overall improvement in sentiment. However, the outlook remains necessarily cautious because of concerns such as lower demand and higher costs caused by inflation and increasingly severe labor shortages.」

「In addition to the effects of production stoppages at major automobile manufacturers, the Noto Peninsula earthquake and the slowdown in the Chinese economy weighed on production activity, causing manufacturing sentiment to deteriorate. Although temporary downward pressures are expected to ease, the outlook remains necessarily cautious because of concerns such as lower demand and higher costs caused by inflation and increasingly severe labor shortages.」

「During the consolidated fiscal year under review, corporate sentiment improved, particularly in automobiles, which benefited from a recovery in production as semiconductor supply shortages eased and from the weaker yen, as well as in electrical machinery and other industries where demand showed signs of recovery. However, the outlook remains necessarily cautious because of concerns about adverse effects such as lower demand accompanying a slowdown in the global economy and higher costs due to rising labor expenses.」

「During the cumulative third quarter under review (1 January 2023 to 30 September 2023), corporate sentiment continued to improve as price pass-through progressed across a broad range of industries and automobile production continued to recover as semiconductor shortages eased. Although concerns about the Chinese economy remain, further improvement in corporate sentiment is expected as the recovery in automobile production is expected to spread to other industries.」

「Although the slowdown in European and U.S. economies continues to have an impact, the earnings environment improved as import prices declined, and automobile production showed signs of recovery as the semiconductor shortage eased, leading to improving corporate sentiment.」

「During the cumulative first quarter under review (1 January 2023 to 31 March 2023), sentiment in the non-manufacturing sector was improving, but manufacturing sentiment deteriorated due to downside pressure on demand caused by a slowdown in overseas economies. The outlook also remains necessarily cautious because of concerns that monetary tightening may slow overseas economies.」

「Manufacturing sentiment deteriorated, particularly in materials industries, as profits were squeezed by the contraction of the semiconductor market, rising resource prices and higher costs caused by the weaker yen. The outlook remains necessarily cautious because of the risk of a slowdown in overseas economies and the effects of higher costs.」

「During the cumulative third quarter under review (1 January 2022 to 30 September 2022), sentiment in the non-manufacturing sector improved, but manufacturing sentiment deteriorated, particularly in materials industries, as profits declined because higher costs caused by the situation in Ukraine, rising resource prices and the weaker yen could not be fully passed on through selling prices. The outlook also includes risks that price increases may not be fully passed through and that higher interest rates may slow economic sentiment in Europe and the United States, making a cautious view necessary.」

「During the cumulative second quarter under review (1 January 2022 to 30 June 2022), corporate sentiment in the non-manufacturing sector improved as restrictions on activity were eased. However, manufacturing sentiment deteriorated across both materials and processing industries, including automobiles, due to higher costs caused by rising resource prices related to the situation in Ukraine and the weaker yen, as well as supply-chain disruptions caused by the lockdown in Shanghai. The outlook remains necessarily cautious.」

「During the cumulative first quarter under review, corporate sentiment generally deteriorated due to factors including soaring resource prices and the spread of COVID-19. At manufacturing sites in Japan, corporate sentiment deteriorated among companies that procure materials from overseas, as resource prices rose and the yen weakened. Automobile-related companies were also affected by production cuts necessitated by the spread of COVID-19 and the semiconductor shortage. Together with higher resource prices resulting from the Ukraine crisis and the weaker yen, these conditions make it necessary to take a cautious view of the outlook.」

「Although many uncertain factors remain, including the future spread of COVID-19 and the effects of shortages of semiconductors and parts, leading to a cautious view of the outlook, capital investment is on an increasing trend, including investment looking ahead to the post-COVID period, and further recovery is expected.」

「During the cumulative second quarter under review (1 January 2021 to 30 June 2021), the Japanese economy lacked visibility on when COVID-19 would be brought under control, with some regions experiencing renewed outbreaks, but economic activity, particularly in manufacturing, moved toward normalization as recovery became pronounced in general machinery and electrical machinery, as well as chemicals and nonferrous metals.」

「During the cumulative first quarter under review (1 January 2021 to 31 March 2021), the Japanese economy lacked visibility on when COVID-19 would be brought under control, with some regions experiencing renewed outbreaks, but economic activity, particularly in manufacturing, moved toward normalization as recovery became pronounced in production machinery, automobiles and electrical machinery.」

「However, the pace of improvement in corporate sentiment has remained slow as infections began to spread again, concerns about the outlook remained and the effects of the ongoing U.S.-China trade friction compounded these factors.」

「However, concerns about a renewed spread of infections remain, and the level of corporate sentiment is low as the effects of the ongoing U.S.-China trade friction compound those concerns.」

「During the cumulative second quarter under review (1 January 2019 to 30 June 2019), corporate sentiment generally deteriorated as the global spread of COVID-19 caused factories and other facilities to suspend or slow operations worldwide, while logistics and the movement of people were disrupted by infection-prevention measures.」

「During the cumulative first quarter under review (1 January 2019 to 31 March 2019), corporate sentiment generally deteriorated as the global spread of COVID-19 caused factories and other facilities to suspend or slow operations worldwide, beginning in China, while logistics and the movement of people were disrupted by infection-prevention measures.」

「During the cumulative third quarter under review (1 January 2019 to 30 September 2019), corporate sentiment in Japan generally deteriorated as U.S.-China trade friction continued to worsen, while the slowdown in the Chinese economy and deterioration in Japan-South Korea relations contributed to weak semiconductor-related demand.」

「During the cumulative second quarter under review, corporate sentiment generally deteriorated, affected by US-China trade friction and sluggish semiconductor-related demand.」

「During the cumulative first quarter under review, corporate production activity was generally sluggish, affected by a slowdown in IT-related demand and deterioration in overseas conditions, including the Chinese economy. At manufacturing sites in Japan, particularly, production activity centered on general-purpose and production machinery slowed against the backdrop of weak IT-related demand described above. Corporate earnings also remained sluggish as the business environment for export companies deteriorated due to the stronger yen and labor shortages became more acute.」

「Although uncertainty increased in the Japanese economy during the fiscal year under review due to the impact of repeated natural disasters and developments in US trade policy」

「Although uncertainty increased during the cumulative second quarter under review due to developments including sharp swings in crude oil prices and US-China trade friction, exports and production were on a recovery trend, as was private consumption, while employment and income conditions and corporate earnings improved gradually.」

「Although uncertainty surrounding sharp swings in financial markets and the trade policies of other countries is increasing in the Japanese economy during the cumulative first quarter under review」

「Although uncertainty surrounding policy developments in other countries and geopolitical risks is increasing」

「During the cumulative third quarter under review, the Japanese economy continued to see gradual improvement in employment conditions and corporate earnings, despite growing uncertainty surrounding the policies of the US Trump administration and rising geopolitical risks.」

「During the cumulative second quarter under review, the Japanese economy continued to see a gradual improvement in corporate earnings despite uncertainty in overseas economies and volatility in financial markets.」

「Although concerns persist at manufacturing sites in Japan, particularly regarding political risks in Europe and the United States and rising labor costs due to labor shortages, production activity recovered, led by export-related industries such as automobiles and general-purpose machinery, owing to the weaker yen.」

「Although the Japanese economy was unstable due to the effects of foreign exchange movements and other factors stemming from uncertain overseas conditions」

「While the risk of an economic downturn due to rising uncertainty in overseas economies and financial market volatility is increasing」

「As the risk of an economic downturn due to overseas economic uncertainty and financial market volatility increases」