Japan logs 4.2% export rebound as U.S. shipments tumble double digits

Markets 2025-10-22 18:20

Japan’s export machine came back to life in September 2025, climbing 4.2% year-on-year after four straight months of declines, according to data released by the Finance Ministry.

The recovery came with a huge asterisk though; exports to the U.S. cratered by 13.3%, dragging down momentum just as other Asian markets picked up steam. Demand from Asia rose 9.2% compared to the same month last year, with China leading the charge. Shipments to the mainland, still Japan’s biggest trade partner, jumped by 5.8%, offering some cushion for the blow from the American drop.

The semiconductor industry did most of the heavy lifting. Chip exports were up 12.6% by value from a year ago, giving tech players a reason to breathe. But auto shipments, the backbone of Japan’s trade with the US, got hammered again.

In September, vehicle exports to America fell by 24.2%, a hit, but slightly better than the 28.4% decline recorded in August. This freefall is largely due to the tariff war with Washington, which is still messing with the country’s most valuable export lanes.

Tokyo slashes tariffs but U.S. buyers still pull back

Back in July, the Japanese government reached an agreement with the White House, slashing the originally proposed 25% tariffs on exports down to 15%. That lower rate took effect on August 7, but it hasn’t helped much so far.

The damage had already soaked into the system by then. The export drop to the United States, Japan’s second-largest customer, wiped out any benefit expected from cheaper goods.

Imports didn’t sit still either. They reversed direction with a 3.3% gain in September after falling 5.2% in August. That beat the 0.6% growth forecast by economists polled by Reuters, with businesses restocking energy and machinery goods that had taken a hit earlier this year.

Hirofumi Suzuki, chief FX strategist and research head at Sumitomo Mitsui Banking Corporation, said that the numbers aren’t as great as they look. “Exports are not as strong as they appear on the surface,” Hirofumi said, pointing to the low base effect from last year. He also warned that the ongoing tensions between Washington and Beijing were making future trade unpredictable.

Takaichi takes office as weak yen lifts Nikkei, clouds fiscal outlook

The trade data landed one day after Sanae Takaichi took office as Japan’s first female prime minister, replacing Shigeru Ishiba after months of chaos inside the ruling Liberal Democratic Party.

The new leader has promised a massive fiscal spending plan paired with easy monetary policy, two things investors have already priced in. They’re calling it the “Takaichi trade.” Since she took over the LDP in September, the Nikkei 225 has been flying, reaching record highs this week.

The yen has dropped below 150 to the dollar, down from 147 in the same month last year. But Hirofumi isn’t sold on FX doing much heavy lifting for exports anymore. “Even though the yen was at quite weak levels against the U.S. dollar last year, we have yet to see a significant surge in exports. Policy factors such as tariffs seem to have a larger impact than FX on exports,” he added.

Investors have been watching the numbers closely after Japan’s economy did better than expected in the second quarter. GDP was revised up to 0.5% quarter-on-quarter from an earlier estimate of 0.3%, blowing past the 0.1% growth analysts expected.

Eyes are now on the Bank of Japan, which most economists think will raise its key interest rate to 0.75% sometime this quarter. In the Reuters poll taken between October 14 and 20, 60% of those surveyed (45 of 75) predicted a hike either in October or December. By March, 96% of economists expect borrowing costs to reach at least 0.75%.

Out of 35 economists who gave a specific month, 46% pointed to January, 31% to December, and 14% to October. The rate path is now a key question mark as Takaichi’s economic policies take shape.

She’s promised to boost government spending in essential sectors like energy and national security under what she’s calling “responsible, proactive fiscal policies.” But nobody knows what that really means yet.

In an extra question in the same Reuters survey, 67% of respondents, 18 of 27, said they couldn’t say if they supported or opposed her plan. Meanwhile, 17 out of 26 said they’re worried about what this means for Japan’s already fragile fiscal health.

Join Bybit now and claim a $50 bonus in minutes

Share to:

This content is for informational purposes only and does not constitute investment advice.

Curated Series

SuperEx Popular Science Articles Column

SuperEx Popular Science Articles Column

This collection features informative articles about SuperEx, aiming to simplify complex cryptocurrency concepts for a wider audience. It covers the basics of trading, blockchain technology, and the features of the SuperEx platform. Through easy-to-understand content, it helps users navigate the world of digital assets with confidence and clarity.

How do beginners trade options?How does option trading work?

How do beginners trade options?How does option trading work?

This special feature introduces the fundamentals of options trading for beginners, explaining how options work, their main types, and the mechanics behind trading them. It also explores key strategies, potential risks, and practical tips, helping readers build a clear foundation to approach the options market with confidence.

What are the risks of investing in cryptocurrency?

What are the risks of investing in cryptocurrency?

This special feature covers the risks of investing in cryptocurrency, explaining common challenges such as market volatility, security vulnerabilities, regulatory uncertainties, and potential scams. It also provides analysis of risk management strategies and mitigation techniques, helping readers gain a clear understanding of how to navigate the crypto market safely.

Bitcoin historical price data and trends

Bitcoin historical price data and trends

This special feature gathers multiple articles on Bitcoin’s historical price data, analyzing past trends, market cycles, and key events that shaped its value. It also explores factors influencing price movements, providing readers with insights into Bitcoin’s long-term performance and market patterns.

Detailed Illustrated Guide to Contract Trading

Detailed Illustrated Guide to Contract Trading

This collection, "Detailed Illustrated Guide to Contract Trading," explains the fundamentals of contract trading, including futures and margin trading. It uses clear illustrations to simplify key concepts, risk management strategies, and order types, making it accessible for both beginners and experienced traders.