Japan Export Growth at Over 3-Year High

Japan’s exports rose 4.2% yoy to JPY 9,571.6 billion in February 2026, slowing sharply from a 16.8% surge in the previous month and marking the weakest growth since last October, amid softer demand from China and the U.S. Still, sales extended their growth streak to a sixth month, beating market forecasts of a 1.6% increase. Shipments were mainly higher to Hong Kong (32.3%), Taiwan (6.2%), ASEAN countries (5.1%), the EU (14.0%), India (22.4%), Australia (8.5%), Russia (65.9%), and the Middle East (27.1%). In contrast, shipments fell to China (-10.9%) and South Korea (-2.5%). Exports to the U.S. also slipped 8.0%, steeper than a 5.1% drop in January, due to weakness in automobiles, auto parts, and pharmaceuticals, reflecting headwinds from President Trump's tariffs on a wide range of Japanese goods. Economists expect export recovery to stay modest amid slowing global activity, with Middle East tensions and higher oil prices adding downside risks.

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%).