Risk factors to the overseas economic outlook are wide ranging and likely to be significant, as exemplified by (1) the U.S. macroeconomic policies and their impact on global financial markets, (2) the consequences of protectionist moves, including those observed in U.S.-China trade negotiations and their effects, (3) developments in emerging and commodity-exporting economies, (4) the progress in global adjustments in IT-related goods, (5) negotiations on the United Kingdom’s exit from the European Union (EU) and their effects, and (6) geopolitical risks.
As it can be said that there is uncertainty surrounding overseas economies, it is necessary to stay vigilant regarding these risk factors, including their impact on firms’ and households’ sentiment in Japan. B. Japan’s Economy and Prices 1. Economic activity I will now discuss the economic situation in Japan.