Japanese export values posted the sixth straight year-on-year rise in March, up 3.9%, after rising 11.4% in February. The increase was led by continued solid demand for automobiles and semiconductor-producing equipment (non-ferrous metals also up) ahead of the Trump administration's April 2 announcement of reciprocal tariffs on imports from many trading partners. Shipments of iron and steel fell, hit by the U.S. tariffs on metals that took effect in mid-March. Mineral fuel exports also dipped.

Import values rebounded 2.0% in March, following a 0.7% dip the previous month and the 16.3% jump in January, led by continued purchases of drugs and smartphones. Imports of crude oil, coal and aircraft were down. Export volumes fell 0.8% while import volumes rose 5.3%.
The trade balance posted a surplus of ¥544.1 billion following a revised ¥590.53 billion surplus in February. It compared with a ¥349.86 billion surplus in March 2024 and the record shortfall of ¥3,506.43 billion (¥3.51 trillion) hit in January 2023.

Exports to the United States, which is the largest market for Japanese exports, rose 3.1% on year (+10.5% the previous month), marking their third straight y/y rise. Those to the European Union slipped 1.1% (-7.7%) for the third drop in a row while shipments to China fell 4.8% after marking the first gain in three months in February (+14.1%).

In fiscal 2024 that ended in March, Japanese exports surged to a record high of ¥108.9 trillion, rising 5.9% on year and marking the fourth consecutive annual increase, reflecting strong demand for automobiles, semiconductors and equipment for producing computer chips. Imports climbed 4.7% to ¥114.2 trillion, the second highest amount on record, led by solid demand for computers, smartphones and drugs. As a result, Japan recorded a trade deficit of ¥5.22 trillion in fiscal 2024, its fourth straight year of negative balance.

Japanese export values are forecast to post a sixth straight year-on-year rise in March, up 4.9%, after rising 11.4% in February. The increase is expected to be led by continued solid demand for automobiles, semiconductor-producing equipment and computers ahead of the Trump administration’s April 2 announcement of “reciprocal” tariffs on imports from many trading partners. Shipments of iron and steel are seen down, hit by the U.S. tariffs on metals that took effect in mid-March.

Import values are expected to rebound 3.4% in March, following a 0.7% dip previous month, led by continued purchases of drugs and smartphones. Imports of crude oil, coal and aircraft are estimated to have fallen on year.

The trade balance is forecast to post a surplus of ¥5894.05 billion following a revised ¥590.53 billion surplus in February. It would compare with a ¥349.86 billion surplus in March 2024 and the 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.