Japan’s exports rebounded in September, ending a four-month streak of declines despite U.S. tariffs—a positive signal for the economy that still leaves concerns about the longer-term effects of trade policy.
The Finance Ministry reported Wednesday that outbound shipments rose 4.2% in September from a year earlier, recovering from August’s 0.1% decline. The result fell short of the 5.7% increase forecast in a FactSet poll of economists.
Economists said Japan’s exporters continue to face uncertainty in the new era of trade protectionism. They pointed to foreign-exchange movements as a key factor behind last month’s rebound. The yen weakened 2.3% against the dollar in September compared with a year earlier, making Japanese goods more competitive abroad.
Japan’s exports rebound, but tariff concerns remain
“Looking ahead, there is a possibility that the yen will appreciate due to expectations for the interest rate differential between Japan and the U.S. to narrow, which could suppress the value of exports,” said Norinchukin Research Institute economist Takeshi Minami. The data revealed ongoing weakness in U.S. exports, which dropped 13.3% from the previous year due to drops in shipments of motors, chip-making machinery, and automobiles—likely as a result of the tariffs imposed by the Trump administration. After a 13.7% decline in August, that was the sixth consecutive month of contraction.
One of Japan’s most important industries is still under pressure from Washington’s 15% “reciprocal” tariff on Japanese goods, which is equal to the rate imposed on auto and parts exports.
As they determine when to raise interest rates again, policymakers are examining how U.S. trade policy is influencing Japan’s economy and business practices. Later this month, the Bank of Japan will publish its quarterly outlook on inflation and growth. Minami warned that weak global growth may constrain Japan’s ability to fuel expansion through exports
“If, as many expect, global economic growth remains slow for some time, it is unlikely that exports, or external demand, can be relied upon to drive Japan’s economy,” he said.
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