Japan's Exports Surpass Expectations, Yet Trade Deficit Persists

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Japan's Exports Surpass Expectations, Yet Trade Deficit Persists

In October, Japan's exports increased by 3.1% year-on-year, reaching 9 trillion 427 billion yen, demonstrating a strong rebound from the 1.7% year-on-year decline seen in September. The expectation was for a 2.2% increase in exports in October. This recovery was primarily driven by a 1.5% year-on-year rise in shipments to China, supported by strong demand for chip manufacturing equipment.

However, exports to the United States, Japan's largest trading partner, fell by 6.2% year-on-year, reflecting weaknesses in automobile shipments.

On the import side, growth remained modest at 0.4%, totaling 9 trillion 888 billion yen, while analysts had anticipated a 0.3% contraction in imports.

As a result, the monthly trade balance showed a deficit of 461.2 billion yen for the fourth consecutive month, against an expectation of a deficit of 360.4 billion yen.

According to seasonally adjusted data, exports decreased by 0.7% month-on-month to 8 trillion 882 billion yen, while imports rose by 0.2% to 9 trillion 239 billion yen, resulting in a seasonally adjusted trade deficit of 358 billion yen.