Japan Trade Gap Narrows Sharply But Misses Surplus Forecast

Japan’s trade surplus increased to JPY 667.0 billion in March 2026 from JPY 529.8 billion in the same month a year earlier, marking a second straight month in surplus as export growth outpaced imports. However, the latest figure fell short of market expectations for a JPY 1,106 billion gain. Exports rose 11.7% yoy to a record high of JPY 11,003.3 billion, beating forecasts of 11% and accelerating from February’s 4.0% gain. Growth was supported by strong demand from China, the EU, and ASEAN countries, alongside a modest rebound in shipments to the U.S. Meantime, imports rose10.9% to JPY 10,336.3 billion, surpassing forecasts of 7.1% and quickening from 10.3% in February. This was the fastest import growth since January 2025, on solid domestic demand after Tokyo’s sizeable stimulus rollout in late 2025. Looking ahead, Japan’s trade outlook remains uncertain amid the fallout from the Middle East conflict, as many shipments in March had already left the region before the escalation began.

Japan’s trade surplus plunged to JPY 57.3 billion in February 2026 from JPY 559.2 billion a year earlier, as import growth outpaced exports. Still, the latest outcome defied market expectations of a JPY 483.2 billion deficit. Exports rose 4.2% year-on-year to JPY 9,571.6 billion, easing markedly from a 16.8% surge in January and marking the weakest growth since last October, amid softer demand from China and the U.S. Still, sales growth stretched into a sixth month, topping forecasts for a 1.6% rise. Meanwhile, imports jumped 10.2% to JPY 9,514.3 billion, below forecasts of 11.5% but rebounding from a 2.6% decline in January. This was the fastest increase in shipments since July 2024, supported by firm domestic demand following Tokyo’s large stimulus package introduced in November.

Japan’s trade deficit decreased significantly to JPY 1,152.7 billion in January 2026 from JPY 2,741.7 billion in the same month a year earlier, beating market expectations for a JPY 2,142.1 billion shortfall, as exports jumped while imports declined. Year-on-year, exports surged 16.8% to JPY 9,187.5 billion, sharply accelerating from a 5.1% growth in December and marking the fastest rise since November 2022, buoyed by strong demand from China and other Asian markets ahead of the Lunar New Year. Meanwhile, imports dropped 2.5% to JPY 10,340.2 billion, missing estimates of a 3% increase and reversing a 5.2% growth in December. It also marked the first drop in purchases since last August, despite Tokyo’s massive stimulus package launched in November, the first under the Takaichi administration.