Japan's Exports Decline for the First Time in 10 Months... Trade Balance in Deficit for 3 Consecutive Months

Impact of Decreased Exports to the US and China

Japan's trade balance has recorded a deficit for three consecutive months, with exports declining for the first time in 10 months.

According to the preliminary September trade statistics released by the Japanese Ministry of Finance on the 17th, the trade deficit last month amounted to 294.3 billion yen (approximately 2.69 trillion KRW). This figure exceeded the market's expected deficit of 237.6 billion yen.

September imports increased by 2.1% year-on-year to 9.3325 trillion yen (approximately 85.2 trillion KRW), while exports decreased by 1.7% to 9.0382 trillion yen (approximately 82.5 trillion KRW).

Notably, this is the first time since November last year that Japan's export value has declined. Foreign media analyzed that the reduction in Japanese exports was due to decreased demand from China and a slowdown in U.S. growth. Japan's exports to China and the U.S. in September fell by 7.3% and 2.4% year-on-year, respectively. Kazuma Kishikawa, an economist at Daiwa Institute, diagnosed, "Due to the uncertainty in the Chinese economy, Japan is likely to face difficulties in exports over the coming months."

With the Bank of Japan's interest rate hikes causing the yen's value to rise, there are also forecasts that exports may continue to stagnate for the time being. The yen-dollar exchange rate, which had exceeded 160 yen per dollar in July, stood at 149.56 yen around 2:10 p.m. on the day. A decline in the yen-dollar exchange rate indicates an appreciation of the yen.

Meanwhile, Japan's trade deficit for the first half of the 2024 fiscal year (April 2024 to March 2025) reached 3.0167 trillion yen (approximately 28.3 trillion KRW). The deficit widened by 14.4% compared to the same period last year. Kyodo News analyzed the expansion of the trade deficit, stating that "the increase in imports was influenced by the weak yen and strong dollar."