Japan Export Growth at Over 3-Year High

Japan’s exports surged 16.8% year on year to JPY 9,187.5 billion, sharply picking up from a 5.1% growth in the previous month and marking the fastest pace since November 2022. The latest reading also exceeded market forecasts of 12%, boosted by robust demand ahead of the Lunar New Year from China (32%) and other Asian markets, including Hong Kong (73.1%), Taiwan (35.3%), South Korea (10.8%), ASEAN countries (9.3%), and Vietnam (30.6%). Sales also expanded to India (9.2%), Australia (9.6%), the EU (29.6%), Russia (53.4%), and Germany (30%). In contrast, shipments to the U.S. fell 5%, due to weakness in pharmaceuticals, metal processing machinery, and autos, following an 11.1% plunge in December. After a sharp hit from U.S. tariffs in Q3 2025, Japan’s exports have begun to recover following the September deal with Washington that imposed a uniform 15% tariff on most goods. Still, the rebound remains fragile amid lingering global uncertainty.

Japan’s exports climbed 5.1% year on year to a record JPY 10,411.5 billion in December 2025, extending gains for a fourth consecutive month. The increase was driven by robust year-end overseas demand and a weaker yen, while the overall impact of U.S. tariffs proved less severe than initially anticipated. Still, the latest result was below November's growth figure and market forecasts of 6.1%, as Japanese automakers continued to face a 15% tariff on their U.S.-bound shipments. Exports to the U.S. plunged 11.1% from a year earlier in December, weighed down by declines in cars, auto parts, and chip-making equipment, a sharp reversal from an 8.8% increase in November. Sales also fell to South Korea (-1.9%) and Australia (-10.2%). Meanwhile, exports grew to China (5.6%), Hong Kong (31.1%), Taiwan (20.7%), Vietnam (13.7%), the ASEAN countries (5.2%), the EU (2.6%), Russia (27.3%), the Middle East (18.8%), and South Africa (21.9%).

Japan’s exports rose 6.1% year-on-year to JPY 9,714.7 billion in November 2025, marking a third consecutive monthly gain and surpassing market forecasts of 4.8%. It was the fastest pace in outbound shipments since February, driven by a rebound in U.S. exports and a weaker yen that bolstered competitiveness. Shipments to the U.S. climbed 8.8%, the first increase in eight months, due to demand for pharmaceuticals, mineral fuels, and construction machines. Exports also grew to Hong Kong (11.4%), Taiwan (16.8%), Vietnam (14.0%), the ASEAN countries (4.6%), the EU (19.6%), and Russia (29.9%). In contrast, sales fell to China (-2.4%), South Korea (-1.6%), Australia (-19.2%), and the Middle East (-1.5%). Tariff pressures proved milder than feared, with exporters absorbing part of the burden to protect market share. Further relief also came from the September U.S.–Japan trade pact, which set a uniform 15% tariff on most imports, easing earlier levies of 27.5% on autos and 25% on other goods.