Japan’s March 2025 trade balance revealed a fragile balance due to global trade tensions and domestic pressures. Exports missed forecasts, with a trade surplus narrowing the fiscal year deficit.
US tariffs and a weak yen could complicate the outlook as Japan navigates negotiations and competition.
Exports Miss Targets
Exports grew 3.9% to 9.8 trillion yen, below the 4.5% figure expected and down from February’s 11.4% surge.
Middle East exports jumped 17.1%, but US shipments rose only 3.1%. Autos, 28.3% of US exports, face 25% tariffs from April 3, with steel and aluminum levies already in effect since March 12, though higher tariffs are paused for 90 days. ⁽¹⁾
Source: Bloomberg
Imports and Surplus Growth
Imports increased 2% to 9.3 trillion yen, missing the 3.1% forecast, aiding a 544.1-billion-yen surplus, up from 349.9 billion yen last year. The US surplus hit 9 trillion yen ($63 billion) for the fiscal year, but a 5.2 trillion-yen annual deficit persists, driven by costly energy imports and a weak yen. ⁽²⁾
US Tariffs and Talks
Trump’s tariffs, including 25% on steel, aluminum, and autos, threaten Japan, the sixth-largest US steel supplier. Trade talks, with Trump claiming “big progress” on Truth Social, involve Treasury Secretary Bessent and Commerce Secretary Lutnick.
Japan may boost US agricultural imports to ease tensions, avoiding retaliation as exports to China (-4.8%) and Europe (-1.1%) dip. ⁽³⁾
Economic Pressures
While tourism increases exports, a weakening yen increases import expenses. Chinese goods are overtaking Japan as the country’s export supremacy declines. Trade disputes between the US and China could damage Japan by flooding markets. The picture is clouded by global concerns and domestic inflation, despite the surplus. ⁽⁴⁾
