BUSINESS – In October 2025, Japan’s exports surged by 3.6% year-on-year — well above market expectations of just 1.1%, according to Reuters-reported government data. This strong performance was powered primarily by robust demand in Asia and Europe, which helped counterbalance weaker U.S. shipments.
Shipments to Asia climbed 4.2% over the year, while exports to Western Europe surged 8.8%, or 9.2% in some reporting, bolstering Japan’s trade performance. On the flip side, exports to the United States declined 3.1%, though the drop is less severe compared to previous months. One key export category, automobiles — Japan’s top-value exports to the U.S. — fell 7.5% in value, but that’s much gentler than the steep 24%-plus slump seen in earlier months.
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A weaker yen also played a role, lifting the value of goods sold abroad and helping offset the impact of U.S. tariffs. Despite rising exports, Japan still ran a trade deficit: imports rose by 0.7%, reducing the shortfall to ¥231.8 billion, better than the expected ¥280 billion.
The timing of this export rebound is notable because it follows a disappointing third quarter: Japan’s GDP contracted 0.4%, dragged down in part by trade weakness. And with consumer inflation measured by core CPI still running above the Bank of Japan’s 2% target for the 43rd month in a row, these stronger export figures may lend support to arguments for a near-term rate hike.
Overall, the data suggest that while U.S. demand remains weak — especially under tariff pressure — Japan is buoyed by resurging overseas markets, giving at least a modest boost to its export-dependent economy.
