Japan Exports Rise Fourth Month as Yen Weakness Lifts Trade Outlook

Japan’s exports increased for a fourth consecutive month in December, highlighting the resilience of the country’s trade sector despite slower shipments to the United States. According to government data released Thursday, the rise in exports was supported by strong overseas demand outside the U.S. and the continued depreciation of the yen, which has made Japanese goods more competitive globally.

Total exports by value grew 5.1% year-on-year in December. While this marked a slowdown from November’s 6.1% growth and fell short of the market’s median forecast of a 6.1% increase, it still reflected steady momentum in Japan’s export-driven economy. The weaker yen played a key role in boosting export revenues, particularly in Asia and other regions.

Exports to the United States dropped sharply, falling 11.1% compared with the same period last year. In contrast, shipments to China rose 5.6%, helping to offset the decline in U.S.-bound goods. Strong demand from other global markets also contributed to overall export growth, underscoring Japan’s diversified trade relationships.

On the import side, Japan saw a 5.3% year-on-year increase in December, exceeding market expectations of a 3.6% rise. Higher imports, combined with slower export growth, resulted in a trade surplus of 105.7 billion yen, or about $667 million. This figure was significantly lower than the forecast surplus of 356.6 billion yen, but still marked a positive balance.

Japan’s export performance has been supported not only by the weaker yen but also by a relatively firm U.S. economy and a trade agreement with Washington reached in September. That deal established a baseline 15% tariff on most goods, and its overall impact on Japanese exports has been milder than initially feared, even as U.S.-bound shipments declined in December.

Reflecting easing concerns over trade tensions, the Japanese government revised its economic growth forecast for the fiscal year ending in March to 1.1%, up from a previous estimate of 0.7%. Meanwhile, the Bank of Japan raised its policy rate in December to 0.75%, the highest level in three decades. The central bank is widely expected to signal readiness for further rate hikes, as yen weakness and expectations of solid wage growth keep inflation risks in focus.