A1 : Since actual results under the previous medium-term management plan diverged substantially from target in part because of assumptions regarding foreign exchange rates, we have set our assumptions at the conservative levels of US$1=¥85 and €1=¥115.
In the case of U.S. dollars, we have basically been able to make use of exchange marry positions to hedge against foreign exchange fluctuations. However, even under the new medium-term management plan, our transactions in euros basically leave us open to major foreign exchange effects. Also, the outlook is that conditions in Europe will probably continue to be unstable, and these various factors form the background for our views. Our assumptions about exchange rates for the second and third years are the same as for the first year.
Regarding trends in profitability, conditions were tough in the previous fiscal year. We are expecting increases in operating income in the first year of the new plan because of the positive effects of currency movements and structural reforms. Thereafter, we are anticipating stable expansion in income.