TOKYO: Japanese exports rose for a third successive month in December as a weak yen boosted the value of shipments, data showed on Thursday, though a decline in volume underscored doubt about an outlook clouded by the unpredictability of U.S. trade policy.
With U.S. President Donald Trump flagging plans for tariffs on imports from major trading partners China, Canada and Mexico, Japanese companies are increasingly worried that protectionist policies could dampen and disrupt global shipments.
Some companies with a U.S. presence are preparing to boost operations in that country, signalling a hit to Japan exports. Meanwhile, exports to China are at the mercy of ever-tightening U.S. restrictions on doing business with Asia’s largest economy.
“As Trump’s tariffs and potential retaliatory measures could upend international trade, we just need to wait and see what will happen,” said Norinchukin Research Institute chief economist Takeshi Minami.
Japan’s December exports rose 2.8% from the same month a year earlier, government data showed, exceeding a median market forecast of 2.3% but slowing from November’s 3.8%.
Demand for chipmaking equipment in Taiwan led exports by type, while the yen’s 3.8% drop versus the U.S. dollar boosted the total value.
But exports to Japan’s two largest trading partners fell, by 3% to China and 2.1% to the United States.
December imports rose 1.8% on year, compared with a 2.6% market forecast and a decline of 3.8% in November.
As a result, Japan ran a December trade a surplus of 130.9 billion yen ($836.80 million), versus the forecast of a 53 billion yen deficit.
Japan logged a fourth successive annual deficit, at 5.3 trillion yen versus the previous year’s 9.5 trillion yen.
Annual exports rose 6.2% and imports rose 1.8%.
Signs of sustained wage growth and consequent rise in consumption are likely to support the case for the Bank of Japan to raise its policy interest rate this week.
Japan’s exports rise faster than expected, helped by weaker yen
But the outlook for external demand is clouded by Trump’s tariff plans which could upend international trade and slow China’s economic recovery.
A survey by the Japan External Trade Organization showed most Japanese companies with U.S. operations are preparing for tariffs through efforts such as strengthening U.S. manufacturing and procurement and product price hikes.
Still, any major tariff impact is unlikely in the first half of the year as regulatory processes needed to implement changes take time, said Daiwa Institute of Research economist Koki Akimoto.
“Japan’s exports are likely to stay flat for a while,” Akimoto said.
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