A vehicle headed for shipment is parked in front of the vehicle carrier Dream Angel at Nagoya Port on Tuesday, June 18, 2024.
Fred Merry | Bloomberg | Getty Images
Japan’s export growth in the final month of 2025 was weaker than analysts expected, rising 5.1% year-on-year as shipments to the U.S. fell by double digits.
Analysts polled by Reuters expected export growth to remain unchanged from November at 6.1%.
Japan’s exports 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%.
However, exports to the United States in December fell again by 11.1%, after increasing by 8.8% in the previous month. Exports to the US increased in November for the first time since March.
Shipments to mainland China, Japan’s largest trading partner, increased by 5.6%, and exports to Hong Kong increased by 31.1% year-on-year. Exports to all of Asia increased by 10.2%.
Imports rose 5.1% in December compared to the same month a year earlier, significantly higher than the 1.3% increase in November and above the 3.6% increase predicted by Reuters.
For all of 2025, Japan’s exports rose 3.1%, but the growth was slower than the 6.2% increase in 2024, as shipments to mainland China and the United States, Tokyo’s top two trading partners, fell by 0.4% and 4.1%, respectively.
Exports to Hong Kong and Taiwan increased by 17.8% and 15.1% for the year, partially offsetting declines in the US and China.
The trade figures were released as Japan prepares for a Feb. 8 snap election called by Prime Minister Sanae Takaichi, with the House of Representatives scheduled to be dissolved on Friday.
Analysts believe that if Takaichi wins, he will be able to pass the fiscal package through parliament with little opposition. This may include maintaining a weak yen to support Japan’s export-oriented economy.
Since the announcement of the election, stock prices in the Japanese market have mostly increased due to the so-called “high market trade,” and the yen has continued to depreciate.
“With a record budget already approved for the fiscal year starting in April, (the victory) brings the possibility of more expansionary fiscal policy,” Sam Johim, an economist at Swiss private bank EFG, said in a note on Monday.
He added that a landslide victory for the ruling Liberal Democratic Party could lead to a rise in Japanese stocks, but could trigger a sell-off in Japanese government bonds and the yen.
The yen exchange rate, which was around 151 yen to the dollar on October 21, when Takaichi took power, has since fallen sharply and is currently hovering around the 158 yen level.
