TOKYO (AP) — Japan's exports experienced a 4.2% increase in September, driven primarily by strong shipments to Asian countries that compensated for a decline in exports to the United States, which were adversely affected by tariffs implemented by former President Donald Trump.
According to data released by the Japanese Ministry of Finance, Japan's exports to Asia surged by 9.2% year-on-year. In contrast, exports to the United States fell by 13.3%, marking the sixth consecutive month of year-on-year declines. Notably, shipments to China rose by 5.8% compared to the same period last year.
One significant contributor to the decrease in exports to the U.S. was the auto sector, where shipments plummeted by 24.2% in September. This downturn is particularly impactful as automakers such as Toyota Motor Corp., which are central to Japan's economy, continue to feel the pressure from tariffs.
On the import side, Japan saw a modest 3.3% increase in overall imports for September, with imports from Asia specifically rising by 6%. Imports from China saw a significant jump of 9.8%, reflecting the growing trade dynamics in the region.
The release of these trade figures coincided with the recent parliamentary election of Sanae Takaichi as Japan's prime minister. Takaichi is noted for her nationalist conservative views but is also recognized for advocating increased public spending. Her election has positively influenced share prices in Tokyo in recent days.
Takaichi has also pledged to boost wages and implement looser monetary policy, which could result in a weaker Japanese yen. A weaker yen would benefit Japan's large exporters by enhancing the value of foreign earnings when converted to yen. However, she faces significant challenges in executing her policies since the ruling Liberal Democratic Party, together with coalition partners, lacks a majority in both houses of parliament. Additionally, her own party is characterized by divisions.
The economic landscape is further complicated by trade developments involving the United States. Donald Trump, who is anticipated to visit Japan later this month for a meeting with Takaichi, announced a trade framework with Japan in July that included a 15% tax on Japanese goods. At that time, Japan committed to investing $550 billion in the U.S. and promised to open its economy more to American cars and rice. This 15% tariff on imported Japanese goods represented a significant reduction from the 25% rate previously stated by Trump.
As Japan navigates these complex trade relationships and political dynamics, the effects on its economy, particularly in sectors like automotive manufacturing, will be closely monitored. The interplay between domestic policy changes under Takaichi's administration and international trade agreements will be crucial in shaping Japan's economic future.
