Japan on Thursday reported a 3.9% rise in March exports compared to a year earlier, a month after exports saw their largest rise since May 2024.
The growth missed expectations of a 4.5% rise from economists polled by Reuters, and was lower than the 11.4% jump in February.
By region, Japanese exports increased the most to the Middle East, recording a 17.1% rise, compared to the same period a year ago.
Exports to the U.S., Japan’s second-largest trading partner, saw a 3.1% rise.
March data does not include the full impact of U.S. President Donald Trump’s tariffs. The U.S. had announced tariffs of 25% on auto imports effective April 3, and 25% levies on steel and aluminum came into effect on March 12.
Trump, however, has suspended his “reciprocal” tariffs of 24% on Japan for 90 days, leaving a baseline tariff of 10%.
The trade data also comes as Japan’s is locked in trade negotiations with the U.S. On Thursday, Trump said in a Truth Social post that there was “big progress” in the talks, having earlier said that he would also be attending the trade meeting. He also wrote that the talks will cover “tariffs, the cost of military support, and ‘TRADE FAIRNESS.'”
Japan was reportedly the sixth largest steel exporter to the U.S. in 2024, and Japanese car brands make up four of the top eight best selling brands in the U.S, with Toyota taking the top spot.
Automobiles are Japan’s top export to the U.S., accounting for 28.3% of all shipments in 2024, according to customs data.
Imports to Asia’s second largest economy by GDP rose 2%, compared to expectations of a 3.1% rise from the Reuters poll.
Japan’s trade deficit narrowed to 544.1 billion yen, but was wider than the Reuters poll expectations of 485.3 billion yen. The deficit in February stood at 590.5 billion yen.
“Japan is no longer the export powerhouse it once was,” said Jesper Koll, expert director at financial services firm Monex Group.
Koll told CNBC that while the yen has been weak, and the fear of tariffs could boost exports via frontloading, China-made were replacing Japanese exports.
This meanz that “as US-China trade wars escalate, Japan will be hurt even more as China will be forced to de-facto dump the capacity it used to sell to America onto global markets,” he said.
By CNBC