Japan’s December exports growth drops to 5.1%, missing expectations
Vehicles set out for shipment parked in front of the Dream Angel vehicle carrier ship at Nagoya Port in Nagoya, Japan, on Tuesday, June 18, 2024.
Fred Mery | Bloomberg | Getty Images
Japan’s export growth in the last month of 2025 missed analysts’ forecasts, up 5.1% year-on-year, as shipments to the US saw a double-digit decline.
Analysts surveyed by Reuters had predicted that export growth would remain unchanged from November at 6.1%.
Japan’s exports fell in mid-2025 due to US tariff concerns, but saw a rebound towards the end of the year after the announcement of a trade deal with the US that saw tariffs reduced to 15%.
However, exports to the US in December continued their decline, falling 11.1% after an increase of 8.8% in the previous month. November’s increase was the first time exports to the United States increased since March.
Shipments to mainland China, Japan’s largest trading partner, increased by 5.6% compared to the same period last year, while exports to Hong Kong increased by 31.1%. Exports to the wider Asian region increased by 10.2%.
Imports in December rose 5.1% year-on-year, a sharp jump from the 1.3% increase seen in November, beating Reuters forecasts for a 3.6% increase.
For the full year 2025, Japan’s exports increased by 3.1%, a softer increase compared to the 6.2% increase in 2024; Shipments to mainland China and the United States, Tokyo’s two largest trading partners, fell 0.4% and 4.1% respectively.
Exports to Hong Kong and Taiwan rose 17.8% and 15.1% for the full year, partially offsetting declines in the US and China.
The trade data comes as Japan prepares for snap elections on Feb. 8 called by Prime Minister Sanae Takaichi and its Lower House is scheduled to be dissolved on Friday.
Analysts said Takaichi’s victory would allow him to push his fiscal agenda through Japan’s parliament with little opposition. It could also include keeping the yen weak as it supports Japan’s export-oriented economy.
Since the election was announced, Japanese markets have been fueled by the so-called “Takaichi trade,” in which stocks mostly rise and the yen remains weak.
“[A win] “After approving a record draft budget for the fiscal year starting in April, this opens up the potential for a more comprehensive fiscal policy,” Sam Jochim, an economist at Swiss private bank EFG, said in a note on Monday.
He added that a strong win by the ruling Liberal Democratic Party could lead to a rise in Japanese stocks but trigger a sell-off in Japanese government bonds and the yen.
The yen, which was around 151 against the dollar on October 21, when Takaichi came to power, has fallen sharply since then and is currently around 158.
