Japan exports in May grow at fastest pace in more than three years, beating estimates
Honda Motor Co. The vehicles departed for shipment from a port in Yokohama, Japan, on Thursday, February 6, 2025. Nominal wages in Japan rose in December at the fastest pace in nearly three decades; This supported the Bank of Japan’s latest rate hike decision and kept the bank on track for further tightening steps. Photographer: Toru Hanai/Bloomberg via Getty Images
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Japan’s exports in May increased by 17% on an annual basis, exceeding expectations, with the fastest increase since November 2022.
This figure was above the 16.2% expected by economists polled by Reuters and above the 14.8% in April.
Japan’s imports increased by 12.5% on an annual basis in May, reaching its highest level since January 2025 and exceeding the 12.8% expectation in the Reuters survey.
Exports continue to be one of Japan’s key economic drivers, with its economy growing by 0.5% sequentially in the first quarter and 1.8% on an annual basis.
The economic data came after the Bank of Japan on Tuesday raised its policy rate by 25 basis points to 1%, the highest level in the last 30 years; It is seen that inflation in the country has increased and the yen remains weak.
A weak yen will likely boost exports, but will also cause domestic concerns by increasing import inflation and weakening purchasing power.
The yen did not move much and traded at 160.4 against the dollar. Japan’s currency tumbled to historic lows even as the finance ministry used 11.7 trillion yen to defend the yen.
The Reuters Tankan survey, which measures business sentiment among major Japanese manufacturers and is closely followed by the central bank, rose to +13 in June, a three-month high, from +8 in May. Non-manufacturing index rose to +32.
The positive figure in Tankan shows that optimists outnumber pessimists.
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