Japan’s Exports Expand 2.8％ in Dec, Faster-Than-Expected

Reuters

11:16 JST, January 23, 2025

TOKYO (Reuters) – Japan’s exports rose for a third straight month in December, data showed on Thursday, suggesting that companies front-loaded shipments ahead of potentially hefty tariffs promised by new U.S. President Donald Trump.

Trump has signaled plans to deploy tariffs on imports from major trading partners China, Canada and Mexico, raising fears that increasingly protectionist U.S. trade policies could dampen and disrupt global shipments.

Japan’s exports rose 2.8% in December from a year earlier, data showed, more than a median market forecast for a 2.3% increase and following a 3.8% rise in the previous month.

Exports to China, Japan’s biggest trading partner, fell 3% in December from a year earlier, while those to the United States were down 2.1%.

Imports rose 1.8% in December on-year, compared with market forecasts for a 2.6% increase and a decline of 3.8% in November.

As a result, Japan ran a trade a surplus of ¥130.9 billion ($836.80 million) in December, compared with the forecast of a deficit of ¥53 billion .

For the whole of 2024, Japan logged a trade deficit of ¥5.3 trillion , marking four consecutive years of deficits but shrinking from the previous year’s ¥9.52 trillion .

Emerging signs of sustained wage growth and expectations it would boost consumption are seen supporting the case for the Bank of Japan to raise interest rates this week.

But the outlook for external demand is increasingly uncertain, as Trump’s tariff plans could upend international trade and hold back China’s economic recovery.

A recent survey by the Japan External Trade Organization showed that most Japanese companies with operations in the United States are preparing for possible additional tariffs.

Those efforts include strengthening manufacturing and procurement in the U.S. and considering product price hikes, according to the survey.

$1 = ¥156.4300