Against this backdrop, as corporate profits are expected to continue improving on the whole, the virtuous cycle from income to spending is likely to operate steadily, and business fixed investment is expected to continue its moderate increasing trend. Exports and overseas economies As I just mentioned, domestic demand is expected to remain firm.
On the other hand, external demand has continued to lack momentum (Chart 4). This is due not only to cyclical factors including sluggishness in global economies such as emerging economies, but also to structural factors such as the accelerated relocation of production overseas by Japanese manufacturing firms.