Japan's exports jumped 16.8% in January from a year earlier, marking the biggest increase in more than three years. The surge was driven by strong Asian demand and front-loading shipments ahead of China's Lunar New Year holidays. While shipments to the U.S. fell, exports of semiconductors and electronic components rose sharply, boosted by artificial intelligence-related demand.
Japan's exports rose 16.8% in January from a year earlier, the sharpest increase since November 2022, according to data released by the Finance Ministry on Wednesday. The figure exceeded median market forecasts of 12% to 13% and marked the fifth consecutive monthly gain, following a 5.1% rise in December. Exports to China surged 32%, while those to Asia overall climbed 25.8% and to the European Union expanded 29.6%. In contrast, shipments to the U.S. declined 5%.
Shipments of semiconductors and other electronic components increased by nearly 40%, with those to China jumping 51.7%, driven by demand related to artificial intelligence. Imports fell 2.5% from a year earlier, against expectations for a 3% rise. This resulted in a trade deficit of 1.15 trillion yen ($7.51 billion), smaller than the forecasted 2.14 trillion yen deficit.
Takeshi Minami, chief economist at Norinchukin Research Institute, attributed the January surge largely to temporary factors. "This probably means that February may see a pullback larger than anticipated. But if you average out January and February, the pace is likely to end up being about the same as at the end of last year," he said. He added, "Although the impact of the Trump tariffs has largely run its course, they are still undoubtedly holding back global growth... But the Japanese economy should be able to achieve modest growth if inflation wanes and consumers gradually get used to higher food prices."
The recovery follows an initial hit from U.S. tariffs in the July-September quarter, with a September trade deal establishing a baseline 15% tariff on nearly all goods. Analysts anticipate momentum from domestic factors like private consumption, supported by wage growth easing cost-of-living pressures. The World Trade Organization has expressed optimism that rapid AI acceleration could bolster global merchandise trade this year, helping to counter U.S. tariff headwinds.
