Japan’s exports beat forecasts with 4.2% growth in February, while shipments to China and the US fell

Japan’s exports rose 4.2% in February from a year earlier, marking a sharp decline after hitting a three-year high in January.

However, the increase was better than the 1.6% rise expected by economists polled by Reuters and against a 16.8% jump in the previous month.

Exports to mainland China, Japan’s largest trading partner, fell 10.9%, while shipments to the US fell 8%. The total value of auto exports to the US, Japan’s largest export, fell 14.8%.

Tokyo’s exports to Washington could further weaken after the US announced Section 301 investigations that could lead to the reimposition of tariffs.

It comes after the Supreme Court struck down Trump’s “reciprocal” tariffs in February.

Despite a decline in exports to its top trading partners, other Asian economies picked up the slack, with goods outbound to Hong Kong rising 32.3% from a year earlier.

Exports to the bloc of 11 Southeast Asian nations, including Indonesia and Thailand, rose 5.1%. The total value of outbound goods to the regional group surpassed that of mainland China, which became Japan’s second-largest export destination in February.

Shipments to Western Europe also rose by 17.5%, supported by sales increases of 10.9% and 18.9% to Germany and the UK respectively.

Japan’s export growth in February was supported by a 25.1% jump in semiconductor export value, while motor vehicle exports rose 2.5% year-on-year.

The export data came shortly before the Bank of Japan’s monetary policy meeting on Thursday, as well as Prime Minister Sane Takaichi’s meeting with US President Donald Trump stateside on the same day.

Imports to Japan rose 10.2%, compared with an expected 11.5% increase and January’s 2.6% decline.

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