Japan Exports YoY

Japan's exports fell 1.7% yoy to a four-month low of JPY 8,134.99 billion in May 2025, reversing a 2.0% gain in April and marking the first decline since last September amid the impact of sweeping U.S. tariffs. Still, the drop was milder than the market consensus of a 3.8% fall. Shipments to the U.S. slumped 11.1%, the second straight monthly drop, due to weaker demand for cars, auto parts, and chip-making machinery. Meanwhile, exports to China shrank 8.8%. In contrast, sales rose to the EU (4.9%), Russia (5.2%), and ASEAN countries (0.1%). PM Shigeru Ishiba and U.S. President Trump recently agreed to extend trade talks after failing to reach a breakthrough. Tokyo continues to seek an exemption from the 25% U.S. auto tariffs, while Trump doubled duties on steel and aluminum to 50% in early June. A 24% reciprocal tariff is set to take effect on July 9 unless a deal is reached, posing a risk to Japan’s fragile recovery, which is already struggling due to weak private consumption.