Containers at a shipping terminal in Yokohama, Japan on Oct. 18, 2021. Japan’s trade deficit surged in September as imports overwhelmed export growth.
Kiyoshi Ota | Bloomberg | Getty Images
Japanese exports climbed 16.8% year on year in January, sharply beating market expectations and growing at their fastest rate since November 2022 as shipments to Asia and Western Europe surged, government data on Wednesday showed.
Growth was higher than December’s 5.1%, and beat Reuters-polled economists’ estimates of 12%.
Value of exports to China, Japan’s largest trading partner, jumped 32%, after rising 5.6% in December at a time when the two countries are locked in a diplomatic standoff over Prime Minister Sanae Takaichi’s comments over Taiwan.
Shipments to the U.S. fell 5%, after declining 11.1% in December. Washington is Japan’s second largest trading partner.
Region-wise, a near 26% jump in shipments to Asia and over 25% to Western Europe helped accelerate exports growth, and more than offset the 3.3% decline in North America.
Food, machinery and electrical machinery — which includes chips — were commodities that saw the sharpest growth, up 31.3%, 14.3% and 27.3%, respectively.
Transport equipment, which contributed over 20% to exports, climbed by 0.8%. The segment, which includes cars and auto parts and has been a key growth driver for Japanese exports, has come under pressure following U.S. tariffs.
Japan’s Nikkei 225 stock index rose 0.9%, while the broader Topix gained 1.26%. The yen marginally strengthened to 153.43 against the U.S. dollar, while yield on benchmark 10-year government bonds was was down 1 basis point at 2.119%.
Nikkei 225 performance so far this year
Imports in January fell 2.5% year on year, compared with Reuters estimates of a 3% rise, and a 5.1% jump in the prior month.
The stellar growth in outbound shipments will be a welcome start to the new year after Japan’s exports growth declined to 3.1% last year, compared to the 6.2% rise seen in 2024.
The Japanese economy expanded by just 0.1% year on year in the fourth quarter, supported by private demand, but net exports shaved 0.8 percentage point off growth. For the full year, GDP grew 1.1% year on year, also weighed down by net exports.
Japanese shipments fell during the middle of 2025, hit by U.S. tariff worries, but saw a rebound toward the end of the year after a trade deal with the U.S. was announced that saw duties slashed to 15%.
The U.S. on Tuesday announced projects valued at $36 billion, according to a Reuters report, including an oil export facility in Texas, an industrial diamonds plant in Georgia and a natural gas power plant in Ohio, to be financed by Japan as part of its $550 billion U.S. investment pledge.
“Our MASSIVE Trade Deal with Japan has just launched! Japan is now officially, and financially, moving forward with the FIRST set of Investments under its $550 BILLION Dollar Commitment to invest in the United States of America,” U.S. President Donald Trump said in a post on Truth Social.
Last week, Japan’s Economy Minister Ryosei Akazawa was quoted by public broadcaster NHK as saying he hoped the initial projects would be finalized before Takaichi and Trump met.
Trump had announced the meeting with Takaichi just before the Feb. 8 Lower House election, which saw Takaichi lead the ruling Liberal Democratic Party to a landslide victory.
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