Japan recorded a substantial year-on-year rise in exports in January, with the value of shipments climbing 16.8%, official data showed on Wednesday. The increase - the fifth consecutive monthly gain - exceeded a median market forecast for a 12% rise and followed a 5.1% gain in December.
The distribution of trade gains was uneven. Exports to China surged 32% from a year earlier, a jump that officials said was helped by stronger demand ahead of the Lunar New Year holiday, which this year falls later than usual. By contrast, shipments to the United States fell 5% year-on-year in January.
On the import side, inbound shipments fell 2.5% from a year earlier, a result that departed from market expectations for a 3% increase. The combination of faster export growth and softer imports produced a trade deficit of 1.15 trillion yen for January, narrower than forecasts that had pointed to a 2.14 trillion yen deficit. In dollar terms, the reported January deficit equated to about $7.51 billion, using the rate of $1 = 153.2000 yen provided in the data release.
The export recovery has been uneven. Japanese exports were initially hit in mid-2023 when U.S. tariffs reduced shipments to the American market during the July-September quarter. Although a September trade agreement with Washington established a baseline 15% tariff on nearly all goods, momentum in exports has remained fragile.
Separately released data earlier this week showed the Japanese economy returned to only meagre growth in the fourth quarter, a performance that fell well short of market forecasts. The undershoot was attributed in the data to weaker-than-expected exports and a disappointing showing in capital expenditure, leaving the recovery tentative.
Analysts cited in the reporting expect the economy to gain traction from domestic sources, including private consumption. Rising wages are expected to help households cope with elevated living costs, which could in turn support consumption-driven growth. The data release did not provide additional details beyond these assessments.
Exchange rate reference: $1 = 153.2000 yen.