Japan records trade surplus as export growth balances weak Chinese demand

Japan recorded a trade surplus of 57.3 billion yen, or $360 million, in February, according to government data, reversing a deficit a month earlier.

Tokyo — TOKYO (AP) — Japan posted a trade surplus of 57.3 billion yen ($360 million) in February, according to government data released Wednesday, reversing a deficit a month earlier.

Exports grew a better-than-expected 4.2% in February to 9.57 trillion yen, the Finance Ministry’s seasonally adjusted preliminary data showed.

Imports grew 10.2% year-on-year to 9.51 trillion yen after a 2.5% contraction in January.

Japan posted a trade deficit of 1.15 trillion that month.

The effective closure of the Strait of Hormuz due to the war against Iran is likely to increase import costs as oil and other fuel prices rise.

Japan imports almost all of its oil, and Brent crude — the international standard — has jumped to nearly $100 a barrel in recent weeks.

Geopolitical uncertainty, particularly the war in Iran, looms large for Japan’s export-dependent economy, but a weaker yen is likely to work as a plus. The US dollar is trading at around 159 yen, down from less than 150 yen a year ago.

Although demand was unusually weak due to this year’s Lunar New Year holiday falling in February, shipments to China were down 10.9% from the same month a year ago.

Arrivals to the US fell 8% as auto exports fell. President Donald Trump’s tariffs on Japanese autos, now at 15%, continue to weigh on Japan’s automakers and auto supplier manufacturers.

Exports to Europe held up, up 17% in February from the same month a year ago. Exports to the rest of Asia also increased by 2.8%.

Investors are watching to see what the Bank of Japan can do on interest rates as the central bank’s policy council wraps up its two-day meeting on Thursday.

“Central banks are waiting to see if these higher oil prices are a temporary blip or a run-through of 2026, when we could see more global peers turn from dovish to hawkish stances,” said Tim Waters, chief market analyst at KCM Trade.

Investors are closely watching any deals that might come from a summit between Trump and Japan’s first female prime minister, Sanae Takaichi, later this week.

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Yuri Kageyama is at Threads: https://www.threads.com/@yurikageyama