Japanese export values fell 1.7% for their first year-on-year drop in 10 months in September, led by a pullback in automobiles as well as declines in mineral fuels and construction/mining equipment, offsetting continued solid demand for semiconductor-producing equipment. It followed a revised 5.5% gain in August and came in weaker than the median economist call of a 1.1% fall. Import values marked a sixth straight rise, up 2.1%, led by computers, semiconductor-producing equipment and drugs while crude oil purchases dropped. It was larger than the consensus forecast of a 1.7% rise.

The trade balance posted a ¥294.3 billion deficit for a third consecutive shortfall after a revised ¥703.20 billion deficit in August and compared with a ¥60.6 billion surplus in September 2023 and a record shortfall of ¥3,506.43 billion (¥3.51 trillion) hit in January 2023.

Shipments to China, a key export market for Japanese goods, posted their first year-on-year drop in 10 months, down 7.3%, hit by lower demand for autos and auto parts and mineral fuels, as the world's second largest economy continues to fight the drag from its property market problems. Japanese exports to the European Union fell 9.0% for the sixth straight fall, hit by lingering sluggish demand for automobiles, iron and steel and construction machinery. Even exports to the United States fell 2.4% on autos and construction machinery, after marking their first drop in 35 months (down 0.7%) in August.

In its monthly economic report for September, the government maintained its overall assessment after upgrading it slightly in August, saying the economy is"recovering at a moderate pace, although there are some areas where it is pausing." Exports are"nearly flat."

Japanese export values are forecast to dip 1.1% for their first year-on-year drop in 10 months in September, following a revised 5.5% gain in August. Some economists predict a 10th straight increase, led by demand for semiconductors, semiconductor-producing equipment and ships as shown in the first 20-day trade data. Import values are expected to mark a sixth straight rise, up 1.7%, on continued needs for computers, refined petroleum products and non-ferrous metals.

The trade balance is forecast to post a ¥173.1 billion deficit for a third consecutive shortfall after a revised ¥703.20 billion deficit in August and compared with a ¥60.6 billion surplus in September 2023 and a record shortfall of ¥3,506.43 billion (¥3.51 trillion) hit in January 2023.

Merchandise Trade balance measures the difference between imports and exports of both tangible goods and services. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade.

Japan's merchandise trade balance measures visible trade and excludes services. Specifically it is the difference between imports of goods and exports of goods. A positive value indicates a trade surplus (exports exceed imports) while a negative value indicates a trade deficit (imports exceed exports). Movements in the trade balance reflect altered demand for Japanese exports which subsequently impact the yen's value and directly affect GDP growth because of the economy's dependence on trade.

The report gives insight into changing trends regarding Japanese trade. Such developments are especially important for Japan, which is an export-oriented economy that has historically experienced large trade surpluses and any change can have a dramatic effect on the domestic economy. Typically the headline number is the change from the previous year in yen along with the percentage change in exports and in imports from the previous year.