TOKYO: Japan’s exports rebounded in October, led by a pickup in chip equipment demand in China, data showed on Wednesday, suggesting that solid global demand was underpinning the country’s still fragile economic recovery.

The data comes as Japanese businesses are weighing the impact of new and potentially hefty tariffs promised by US President-elect Donald Trump that could upend international trade.

Total exports rose 3.1% year-on-year in October, the data showed, more than a median market forecast for a 2.2%% increase and following a 1.7% drop in September.

Exports to China rose 1.5% in October from a year earlier, while those to the United States, Japan’s largest export destination, were down 6.2%, the data showed.

Imports grew 0.4% in October from a year earlier, compared with market forecasts for a 0.3% decease.

That resulted in a trade deficit of 461.2 billion yen ($2.98 billion) in October, compared with the forecast of a deficit of 360.4 billion yen.

While the October data was solid, Japanese exports could face pressure from potential US tariffs, a key element of Trump’s pitch to voters.

A proposed 10% tariff on all US imports could push down Japan’s gross domestic product by 0.13%, and another 0.12% if a potential 60% levy on Chinese-made products triggers retaliatory tariffs from China, according to estimates by Shunsuke Kobayashi, chief economist at Mizuho Securities.

Japan is seeing growing signs of a recovery in domestic demand.

Japan’s July exports growth lags expectations

Last week’s GDP data for the July-September quarter showed a stronger-than-expected pickup in private consumption backed by rising wages.

Bank of Japan Governor Kazuo Ueda said on Monday that the economy was progressing towards sustained wages-driven inflation, leaving open the chance of another interest rate hike as early as next month.