Uncertain business environment due to yen appreciation, falling stock prices and concerns over an overseas slowdown

「In Japan, real wages showed signs of improvement and personal consumption also showed signs of recovery. However, against the backdrop of prolonged price inflation, consumers' focus on protecting their household finances remained firmly entrenched. While spending on necessities was restrained, the trend toward selective consumption, with spending directed selectively toward products and services offering high satisfaction, strengthened further. In addition, weather conditions were unstable in June due to the seasonal rain front and other factors. From July onward, favorable weather and high temperatures boosted demand for outings, but natural disasters such as earthquakes and localized torrential rains affected foot traffic and consumer activity depending on the timing and region, resulting in continued uncertainty in the business environment.」

「The outlook for the economy remains uncertain, as rising geopolitical risks, including heightened tensions in the Middle East, have driven up crude oil and raw-material prices, while higher import costs resulting from the weaker yen have pushed up prices and affected consumer sentiment.」

「Meanwhile, continued inflation has burdened households, further polarizing personal consumption between a preference for saving in daily life and proactive spending on high-value-added products. In addition, the outlook for the economy remains uncertain due to the impact of trade policies overseas, particularly those of the United States.」

「However, inflation caused by soaring raw material and energy prices due to increasingly unstable international conditions and changes in trade policies overseas, particularly in the United States, has affected consumer activity, leaving the economic outlook uncertain.」

「In addition to the risk that weaker overseas economies could weigh on Japan's domestic economy, persistently high prices resulting from increasingly unstable international conditions have entrenched consumers' preference for saving, leaving the economic outlook uncertain.」

「In addition to soaring raw material and energy prices amid growing international instability, inflation caused by higher supply chain labour costs and the weak yen continued to affect consumer activity, leaving the economic outlook uncertain. Climate change, including record-breaking heat, has also had a significant impact on consumers' lives, making initiatives addressing environmental and social issues essential.」

「However, as international instability intensified, soaring raw material and energy prices and prolonged inflation caused by the weak yen prompted consumer spending patterns reflecting heightened efforts to protect household finances to become more pronounced, leaving the economic outlook uncertain. In addition, climate change, including record-high temperatures, has had a significant impact on consumers' lives, increasing the need for initiatives addressing environmental and social issues.」

「However, the outlook remained uncertain as rising raw material and energy prices amid continuing international instability and soaring prices caused by the weak yen affected consumer activity. In addition, climate change affected consumers' lives, making efforts to realize a sustainable society an urgent priority.」

「In March, the basic policy on COVID-19 measures was revised, leaving mask-wearing to individual discretion, and in May COVID-19 was reclassified under the Infectious Diseases Control Law as a Category V infectious disease. The normalization of social and economic activity progressed and consumer activity became more vigorous. However, the economy remained uncertain, as persistently high raw material and energy prices amid continuing international instability, together with inflation caused by the weak yen, continued to affect consumer activity.」

「However, in addition to the renewed increase in new infections from November, heightened consumer efforts to protect household finances against rising prices continued to affect personal consumption, which had begun to recover gradually.」

「Meanwhile, the outlook remained uncertain due to ongoing supply chain instability, rising raw material prices, logistics costs and utility expenses, as well as the rapid depreciation of the yen.」

「During the three-month period ended [the current quarter], the normalization of economic and social activity began as vaccination progressed and the priority preventive measures to prevent the spread of disease were lifted in all regions, even as the effects of the situation in Ukraine and lockdowns in China contributed to supply chain instability and rising raw material prices, logistics costs and utility expenses, leaving the outlook uncertain.」

「However, infections spread again following the emergence of new variants, and the areas subject to priority preventive measures to prevent the spread of disease were expanded.」

「During the nine-month period ended [the current quarter], the severe conditions caused by COVID-19 gradually eased, and the normalization of social and economic activity progressed against a backdrop of wider vaccine coverage. However, regional disparities remained significant. While economic activity recovered mainly in major developed countries in Europe and the United States, infections spread again in Southeast Asia, where lockdown policies and other measures were implemented by governments, having a significant impact on economic activity.」

「During the six-month period ended [the current quarter], the economy remained uncertain, as the rapid spread of new COVID-19 variants led to a substantial increase in the number of new infections.」

「As the spread of COVID-19 remains unresolved, people are required to limit their activities, including by maintaining physical distance from others to prevent droplet and contact transmission.」

「In Japan, restrictions on activities were eased and economic conditions continued on a gradual recovery trend, partly due to the government's Go To campaign to support the recovery of social and economic activity. However, the number of COVID-19 cases began rising again from October, creating an environment in which changes in behaviour to prevent infection are required.」

「Assuming that the risk of further infection spread will continue, economic activity is being conducted under a new normal in which measures are taken against infectious diseases in line with a new lifestyle. As a result, economic conditions have continued on a gradual recovery trend, having bottomed out in May. Across the Group, including overseas operations, customer numbers have continued to stagnate as the spread of COVID-19 has persisted.」

「Although the state of emergency was lifted nationwide, the number of infections continued to rise, particularly in the Tokyo metropolitan area, and concerns over a second and third wave of the spread of COVID-19 rose rapidly. With no early end in sight, uncertainty over the outlook continues.」

「During the current third-quarter consolidated cumulative period, no new business or other risks arose. There were also no material changes to the business and other risks described in the securities report for the previous fiscal year.」

「In Japan during the current consolidated fiscal year, personal consumption was temporarily depressed by natural disasters and other factors, but the economy has remained on an expansionary trend as capital investment continued to expand steadily, while a strong global economy and rising wages supported personal consumption.」

「During the first nine months of the current cumulative consolidated period, the Japanese economy continued to recover, supported by improvements in the employment and income environment and stronger domestic demand, including personal consumption and private-sector capital investment.」

「During the first half of the current cumulative consolidated period, the Japanese economy continued to recover, supported by improvements in the employment and income environment and stronger domestic demand, including personal consumption and private-sector capital investment.」

「During the first quarter of the current cumulative consolidated period, the Japanese economy continued on a recovery path, the employment and income environment tended to improve, and personal consumption continued to recover moderately.」

「In Japan during the current consolidated fiscal year, the employment and income environment tended to improve as the economy gradually recovered, and a virtuous cycle in domestic demand, including personal consumption and private-sector capital investment, progressed.」

「In addition, consumers continue to favor saving due to uncertainty over the outlook.」

「Although the Japanese economy continued on a moderate recovery path, supported by improvements in the employment environment and other factors, consumers continued to favor saving due to uncertainty over the outlook.」

「In Japan during the current consolidated fiscal year, the employment and income environment tended to improve as the economy gradually recovered, although personal consumption showed signs of stagnation. In South Korea, the economy remained stagnant due to sluggish exports resulting from economic trends in Europe and the United States.」

「During the first nine months of the current cumulative consolidated period, personal consumption stagnated due to unstable overseas economies and fluctuations in foreign exchange rates and share prices.」

「During the first half of the current cumulative consolidated period, the stronger yen and falling share prices progressed against a backdrop of unstable overseas economies, while personal consumption continued to show signs of stagnation.」

「The business environment remained uncertain due to the stronger yen, falling share prices and concerns over a slowdown in overseas economies, while personal consumption continued to show signs of stagnation.」