Updated February 21st, 2024 at 17:44 IST

Japan's exports surge 12% in January, trade deficit shrinks

Despite the recent economic challenges, some analysts expect Japan's economy to recover.

Reported by: Business Desk
Japan export surges | Image:Pixabay
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Japan export surge: Japan's exports grew by nearly 12 per cent in January, driven by strong shipments of vehicles, auto parts, and machinery, leading to a significant reduction in the nation's trade deficit.

According to government data released Wednesday, the trade deficit shrank to 1.76 trillion yen ($12 billion), approximately half of what it was a year ago, as imports declined by 9.6 per cent from the previous year. Exports to North America, the rest of Asia, and the Middle East increased, while imports decreased across all global regions.

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Imports, which have been declining on a monthly basis for nearly a year, totaled 9 trillion yen ($60 billion), with the largest drops seen in oil, natural gas, and iron ore.

Economic Challenges 

Meanwhile, exports totaled 7.3 trillion yen ($48 billion), marking the second consecutive month of growth and surpassing analysts' expectations of around 10 per cent growth. Japan, however, slipped to become the world's fourth-largest economy, according to nominal gross domestic product (GDP) data for last year, trailing behind the US, China, and Germany.

Despite the recent economic challenges, including a technical recession and concerns about deflation, some analysts expect Japan's economy to recover later this year and in 2025. Rising energy prices have posed challenges for the resource-poor nation, which heavily relies on manufacturing exports for economic growth.

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Additionally, tourism, which contributes to exports, is experiencing a solid comeback after being severely impacted by travel restrictions related to the COVID-19 pandemic.

(with PTI inputs)

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Published February 21st, 2024 at 10:53 IST