Japan’s exports rose for a second straight month in October, signalling a partial recovery after recent tariff-driven weakness in U.S. demand.
- Total shipments increased 3.6% year-on-year, beating expectations for a 1.1% rise, though exports to the United States still fell 3.1%.
- Shipments to China grew 2.1%, helping offset the drag from the U.S. market.
Imports also surprised to the upside, rising 0.7% versus expectations for a decline, leaving Japan with a smaller-than-forecast trade deficit of ¥231.8 billion.
The improvement comes after Japan’s Q3 GDP contracted for the first time in six quarters, largely due to U.S. tariffs that hit export volumes. A revised trade deal implemented in September lowered U.S. tariffs to a baseline 15%, down from earlier punitive rates of 25–27.5%, offering some relief to manufacturers. Even so, analysts warn U.S.-bound shipments may stay soft as Japanese automakers pass more of their tariff costs on to American consumers.
Solid domestic demand — driven by capital spending and firm private consumption — supported Q3 growth, but economists caution that a prolonged export downturn could undermine Japan’s fragile recovery.
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