The new year has started. At the beginning of this month, many entrance ceremonies and entrance ceremonies were held while cherry blossoms were in bloom. Compared to last year, the percentage of formats that actually gather at the venue instead of online formats has increased. Japan Stratus Technology is one month early because March is the start of the new fiscal year, but in the middle of March, all employees held an event online to share the aim and policy of the new year. At the end of March, sales representatives gathered to hold a kick-off meeting for this year. This year, we are committed to focusing on measures to respect diversity and education to build professional careers at our headquarters in the U.S., so we would like to focus on Japan Stratus Technology as well.
Looking back on the last year, I recall that many issues occurred one after another, and I was pressed to respond to them. The Corona disaster marked the fifth and sixth wave of the number of infected people, and the Company was not an exception, and the number of employees and their families were infected. Among them, we continued to promote telecommuting, thoroughly prevent infection with Ophis, and promoted the second and third vaccinations while implementing occupational inoculations. In supply chain issues, semiconductor shortages in particular have had a significant impact on product costs and delivery times. Depending on the parts, each company may compete at a price 100 times the normal price. Last year, we were able to successfully release the new ztC Edge 200i/250i and ship it to the market. We were also able to manage to overcome supply chain issues and meet ftServer customer deadlines. As a result of these results, we were able to achieve results that were close to the plan in our performance. We believe that this is the result of the cooperation of our partners and the hard work of our employees.
Planning for the beginning of the year is not easy in any year, but this year will be more difficult than usual. The first factor is that it is difficult to read how long the impact of the coronal disaster and supply chain challenges that have continued since last year will continue. However, these issues will take time, but there is no doubt that they will be improved. In fact, economic activity in Wiz Corona has started in many countries, and the shortage of semiconductors continues intermittently, but it is expected to improve slightly after autumn. The second factor is the macroeconomic instability in Japan. Japan created a weaker yen through monetary policy, and enjoyed this trend, mainly in the export industry, for a certain period of time. Recently, however, the yen has been weakening more than expected. Therefore, in Japan, which relies on imports of crude oil and natural gas resources, food and medicines such as wheat, the current account balance has fallen into a large deficit, coupled with the lack of the momentum of the export industry as before. Moreover, this trend is likely to continue for a while.
January of this year was the second largest current account deficit so far, but does not include the impact of Russia’s ongoing invasion of Ukraine. Statistically, the effects of soaring resources and food prices due to this impact will appear in the trade balance. Interest rate differentials between Japan and the United States are also widening, and at present, no specific factors have been found that could halt the yen’s depreciation. There are signs of bad inflation, where the price of goods and services will rise more violently than the salary level will rise. In summary, the coronal disaster and supply chain problems, which were issues in the last fiscal year, are expected to improve over time, but macroeconomically the current account deficit continues, and it is likely to be a somewhat bad inflation situation.
In this business environment, Japan Stratus Technology has formulated growth areas for the edge business in the fields of automotive and automotive parts, high-tech including semiconductors, transportation including trains, and pharmaceuticals and life sciences. Looking at other regional focus areas, the U.S. includes oil and gas, pharmaceuticals and life sciences. Asia Pacific includes mining, oil and gas, and transportation. Europe includes renewable energy, transportation, pharmaceuticals and life sciences. What’s interesting is that there are overlaps, but there is no area to focus on all four regions, and there is always a region that is characteristic of each region. In each region, recruitment cases will be created internally as blueprints, so sharing them in four regions will deepen knowledge in common focus areas, and other regions will refer to the unique focus area of one region and consider it as a new area.
Of course, existing traditional businesses that support the growth of edge businesses are also expected to receive stable orders in the fields of finance, including payment solutions, and retail and services. In these areas, there is a certain level of growth potential in the domestic market, and demand for system renewal is high, and we are expecting it.
We’ve had a fresh start with new employees joining us this spring. Bullish is the term you’re optimistic about economic trends and business prospects. Is it closer to translate it as “bullish”? Bull Seems to be a word derived from “bull”. At the start of this fiscal year, it seems to be a bit of a haze in the macroeconomic environment, but against the background of the corona disaster since last year and supply chain issues improving, the U.S. economy is showing vigor, and there are signs that the Asia-Pacific economy is also recovering. I would like to expect a good business.