A container at a shipping terminal in Yokohama on October 18, 2021. Japan’s trade deficit sharply increased in September as imports outpaced export growth.
Kiyoshi Ota | Bloomberg | Getty Images
Government data on Wednesday showed Japan’s exports rose 16.8% in January from a year earlier, well above market expectations and the fastest growth since November 2022 as shipments to Asia and Western Europe soared.
The growth rate was higher than December’s 5.1% and above the 12% forecast by economists polled by Reuters.
Exports to China, Japan’s largest trading partner, rose 32% after rising 5.6% in December, amid a diplomatic standoff between the two countries over Prime Minister Sanae Takaichi’s comments on Taiwan.
Shipments to the U.S. fell 5% after falling 11.1% in December. Washington is Japan’s second largest trading partner.
By region, export growth accelerated with shipments to Asia increasing by nearly 26% and shipments to Western Europe increasing by more than 25%, more than offsetting a 3.3% decline in North America.
Food, machinery, and electrical machinery (including chips) were the products with the fastest growth, increasing by 31.3%, 14.3%, and 27.3%, respectively.
Transportation equipment, which contributed more than 20% to exports, rose 0.8%. The sector, which includes cars and auto parts, has been a major growth driver for Japan’s exports but is under pressure due to U.S. tariffs.
Japanese Nikkei Stock Average The stock index rose 0.9%, and the comprehensive TOPIX rose 1.26%. The yen rose slightly against the US dollar to 153.43 yen, and the benchmark 10-year government bond yield fell 1 basis point to 2.119%.
Nikkei Stock Average performance so far this year
Imports fell 2.5% in January compared to the same month a year ago, but Reuters had forecast a 3% rise, compared with a 5.1% rise in the previous month.
The impressive growth in overseas shipments would be a welcome start to the new year, after Japan’s export growth slowed to 3.1% last year, compared with 6.2% growth in 2024.
Japan’s economy grew only 0.1% year on year in the fourth quarter, supported by private demand, but net exports pushed down the growth rate by 0.8 percentage points. Full-year GDP increased by 1.1% from the previous year, weighed down by net exports.
Japan’s shipments fell in mid-2025 due to U.S. tariff concerns, but recovered toward the end of the year after a trade deal with the U.S. was announced that lowered tariffs to 15%.
The United States on Tuesday announced projects worth a total of $36 billion, including a Japanese-financed oil export facility in Texas, an industrial diamond factory in Georgia and a natural gas power plant in Ohio, as part of a $550 billion U.S. investment pledge, Reuters reported.
“A major trade deal with Japan just launched! Japan is now formally and financially moving ahead with the first round of investments under its $550 billion investment commitment to the United States,” US President Donald Trump said in a post on Truth Social.
Last week, Japanese Economy Minister Yoshinari Akazawa said he hoped the initial project would be completed before the meeting between Takaichi and Trump, public broadcaster NHK reported.
Trump announced he would meet with Takaichi just before the February 8th House of Representatives election, and Takaichi led the ruling Liberal Democratic Party to a landslide victory.
