Japan: Merchandise exports rise for first time since April in September
Latest reading: In September, the trade balance was JPY -0.2 trillion, following a JPY -0.3 trillion reading in the prior month. Over the last 12 months, the trade balance summed to JPY -3.3 trillion.
Yen-denominated exports were up 4.2% in year-on-year terms in September, coming on the back of a 0.1% fall in the prior month. September’s rise, slightly weaker than economists had expected, marked the end of a four-month streak of shrinkages. Shipments of semiconductors and other electrical components rose 12.6%. Exports to the EU and China increased solidly, more than outweighing a continued sharp tariff-driven drop in deliveries to the U.S.
Yen-denominated imports were up 3.3% in year-on-year terms in September, coming on the back of a 5.1% decline in the previous month.
Outlook: Our panelists expect exports—of services as well as goods—to have shrunk sharply in Q3 in seasonally and price-adjusted terms, and to decline again in Q4. In 2026, exports should stage a recovery as Japanese firms adjust to the new U.S. tariffs. Strong semiconductor demand will be another tailwind.
Panelist insight: Nomura’s Yuki Ito and Kyohei Morita said:
“After adjusting for inflation and seasonality, we estimate that real exports were up 3.6% m-m in September and that real imports were up 3.1%. Real exports were down 1.3% q-q and real imports were down 1.4% q-q in Jul–Sep. When also taking into account service imports and exports through August, we still think that external demand (exports minus imports) made a negative q-q contribution to real GDP in Jul–Sep.”