Japan’s exports surged 16.8% year-on-year in January—the fastest pace in over three years—driven by a 32% jump in shipments to China and strong gains in machinery and chip-related exports, while imports fell 2.5%, sharply narrowing the trade deficit
Japan’s exports rose at their fastest pace in more than three years in January, underscoring a sharp rebound in external demand and offering a strong start to 2026 for the world’s fourth-largest economy.
Data released on Wednesday by Japan’s Ministry of Finance showed exports climbed 16.8 per cent year-on-year to 9.19 trillion yen in January—the fifth straight month of expansion and the strongest growth since November 2022. The figure handily beat Reuters-polled economists’ expectations of a 12 per cent rise and marked a sharp acceleration from December’s 5.1 per cent increase.
Imports, by contrast, fell 2.5 per cent from a year earlier to 10.34 trillion yen, defying forecasts for a 3 per cent increase. As a result, Japan’s trade deficit narrowed to 1.15 trillion yen ($7.50 billion), much smaller than the 2.14 trillion yen shortfall expected by economists and sharply lower than the year-ago gap.
China, Europe power export rebound
Exports to Asia surged 25.8 per cent in January, driven by a 32 per cent jump in shipments to China, Japan’s largest trading partner. The strong growth comes even as diplomatic tensions simmer between Tokyo and Beijing over Prime Minister Sanae Takaichi’s remarks on Taiwan.
Shipments to Western Europe rose 29.6 per cent, while exports to North America declined 3.3 per cent. Exports to the United States—Japan’s second-largest trading partner—fell 5 per cent, following an 11.1 per cent drop in December.
By commodity, food exports rose 31.3 per cent, machinery shipments increased 14.3 per cent, and electrical machinery—including semiconductors and chips—surged 27.3 per cent. Transport equipment, which accounts for over a fifth of total exports, edged up 0.8 per cent. The segment, which includes cars and auto parts, has faced pressure amid lingering concerns over US tariff policies.
Energy imports fall, ease trade gap
On the import side, mineral fuel purchases declined 14.1 per cent in value terms, reflecting lower costs for liquefied natural gas, petroleum and coal. The drop in energy imports more than offset gains in electrical machinery and manufactured goods imports, helping trim the overall deficit.
Growth boost amid fragile economy
The strong export print offers relief to policymakers after a subdued 2025, when export growth slowed to 3.1 per cent for the full year, compared with 6.2 per cent in 2024.
Japan’s economy expanded just 0.1 per cent year-on-year in the fourth quarter, with net exports shaving 0.8 percentage point off growth. For 2025 as a whole, GDP grew 1.1 per cent, weighed down by weak external demand.
Japanese shipments had slumped in mid-2025 amid uncertainty over US tariffs, but rebounded toward year-end after a trade agreement with Washington reduced duties to 15 per cent.
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