Japan: Japanese exporters continue to frontload shipments in January
Latest reading: Yen-denominated merchandise exports increased 7.3% year on year in January. The print was up from December’s 2.8% rise and marked the best result in six months. This suggests that the threat of U.S. tariffs is continuing to support Japanese exports by encouraging firms to front-load shipments: Exports to the U.S. rose 8.1%, contrasting with the 6.2% fall in those to China and a 15.1% decline in those to Europe.
Meanwhile, yen-denominated merchandise imports rose 16.5% in January, accelerating from December’s 1.7% rise.
Overall, the yen-denominated merchandise trade balance worsened from the previous month, recording a JPY 2.7 trillion deficit in January, compared to a JPY 0.1 trillion surplus in December and marking the biggest shortfall in two years.
Outlook: Net exports decreased for five quarters until Q4 2024, at which point they rebounded, boosted by the frontloading of shipments due to the threat of U.S. tariffs. In Q1 2025, this threat will continue to buoy Japanese exports, with net trade projected by our panelists to rise further. In 2025, exports growth is forecast to more than double from 2024 as global demand for IT products—one of Japan’s top export categories—strengthens. That said, the timing and size of tariff hikes under the Trump administration is a two-sided risk: In 2024, Japan recorded its fifth-largest trade surplus on record versus the U.S.
Panelist insight: Commenting on the outlook, Nomura’s Yuki Ito and Kyohei Morita said:
“We forecast real exports (total of goods and services) in the Jan–Mar GDP statistics up 2.3% q-q and real imports up 1.5%, with external demand (exports – imports) contributing +0.2ppt to real GDP growth (our forecast as of 17 February). This forecast for real exports takes into account: (1) rush demand ahead of Trump tariffs; and (2) a recovery in spending by inbound visitors to Japan (service exports), partly thanks to growth in the number of visitors to Japan from China.”