TOKYO — Japan achieved an unprecedented level of exports last year, with the country’s annual trade deficit narrowing by 44% compared to the previous year, according to a report from the Finance Ministry released on Thursday.
The trade deficit, calculated as the difference between exports and imports, amounted to 5.3 trillion yen (around $34 billion). This reduction was largely influenced by soaring energy prices and increasing global inflation, which led to higher import costs.
Overall, Japan’s exports reached a remarkable 107.9 trillion yen (approximately $691 billion), marking a consistent achievement of surpassing the 100 trillion yen milestone for two consecutive years. This figure represents the highest export value on record since data collection began in 1979, as noted by the ministry.
Some businesses may have accelerated their export activities in response to anticipated tariffs from U.S. President Donald Trump. Trump has signaled intentions to impose a 25% tariff on Canada and Mexico, beginning February 1. During his campaign, he also hinted at potential tariffs on imports from China, although specific details regarding those have yet to emerge.
In December, Japan experienced an unexpected rise in exports, growing by 2.8% year-on-year, while imports saw a smaller increase of 1.8%. The export growth was primarily directed towards Asian and European markets, with a slight decline in shipments to the United States.
Imports surged most significantly from countries such as India, Hong Kong, and Iran. Japan’s exports saw robust demand for its vehicles, semiconductors, and various machinery products.
Another contributing factor to the trade dynamics is the depreciation of the yen, which has inflated the cost of imports. Over the past year, the U.S. dollar has fluctuated around the 150-yen range, occasionally exceeding 160 yen, a rise from the 140-yen range observed a year earlier.
Although Japan has been grappling with a trade deficit for four consecutive years, the deficit recorded last year was notably lower than the 9.5 trillion yen deficit reported in 2023.
