Japan records trade deficit for fifth year running in 2025

Japan posted a smaller trade surplus in December as import growth outpaced an increase in exports, with the overall 2025 deficit narrowing from the previous year, official data showed Wednesday.

According to provisional figures from the Ministry of Finance, Japan's trade balance surplus fell 12% year-on-year in December to JPY105.69 billion, approximately USD667.0 million, from JPY120.30 billion previously.

Exports grew 5.1% to JPY10.412 trillion from JPY9.907 trillion, missing the FXStreet-cited consensus forecast of a 6.1% rise.

"Gains were led by robust IT-related shipping to Asia excluding China, likely reflecting spillovers from the US AI boom. We expect export gains will moderate ahead," commented Norihiro Yamaguchi, lead economist at Oxford Economics.

Min Joo Kang, ING senior economist, South Korea and Japan, said: "Although Japan's December exports fell short of the market consensus of 6.1% growth, the economy continues to demonstrate resilience despite US tariffs and heightened tensions with China."

Imports increased 5.3% to JPY10.306 trillion from JPY9.786 trillion, surpassing the 3.6% forecast.

Japanese exports to the US dropped 11% on-year in December as imports grew 9.2%, meanwhile exports to China rose 5.6% as imports jumped 15%.

Furthermore, the figures show that Japan posted a trade deficit for the fifth straight year in 2025, although the deficit narrowed to JPY2.651 trillion from JPY5.628 trillion in 2024.

Exports were 3.1% higher at JPY110.448 trillion from JPY107.088 trillion, and imports were up 0.3% at JPY113.099 trillion from JPY112.716 trillion.