Japan’s Exports Hit Record as Trade Deficit Shrinks 44%

What Happened

Japan recorded its highest-ever exports in 2024, while its annual trade deficit shrank 44% from the previous year, according to the Finance Ministry.

Key Trade Figures

• Trade Deficit: 5.3 trillion yen ($34 billion), down from 9.5 trillion yen in 2023.
• Total Exports: 107.9 trillion yen ($691 billion), marking the second consecutive year above 100 trillion yen.
• Total Imports: Increased due to rising energy costs and global inflation.

Trade Trends

• December Exports: Grew 2.8% year-on-year, exceeding expectations.
• December Imports: Rose 1.8%, with increases from India, Hong Kong, and Iran.
• Strong Demand: Vehicles, semiconductors, and machinery led export growth.
• Weaker Yen Impact: The yen’s depreciation inflated import values.

Trump Tariff Uncertainty

Some companies may have accelerated exports ahead of potential U.S. tariffs. President Donald Trump has signaled a 25% tariff on Canada and Mexico starting Feb. 1 and previously threatened similar measures against China.

Outlook

Japan has now run a trade deficit for four consecutive years. However, last year’s shortfall was significantly lower than in 2023, and global trade policies will be key in shaping future trends.