Growth in Japan’s exports slowed as the US ramped up its tariff measures, clouding the outlook for an economy that contracted just ahead of the trade war.Exports measured by value gained 2% in April from a year earlier, the Ministry of Finance reported Wednesday. Exports were just below the median analyst estimate for a 2.5% increase. Imports fell 2.2%, compared with the median forecast of a 4.2% drop.
The yen averaged 147.7 against the US dollar in April, 2.6% stronger than a year earlier, which weighed on the readings for yen-denominated exports and imports, according to the Finance Ministry.
Japan’s trade balance swung into a deficit of ¥115.8 billion ($797 million) after two months in the black.Also Read: Japan’s economy shrinks for first time in a year before tariff joltThe slowdown in exports casts a cloud over Japan’s economy, at a juncture when authorities are trying to achieve a positive economic growth cycle fed by prices and wages rising together. After last quarter’s contraction, the Trump administration’s tariff campaign puts Japan at risk of a technical recession if trade continues to drag on the economy when domestic consumption lacks momentum.Semiconductor parts and food led the gain in exports, while cars and steel dragged on shipments. Coal and crude oil led the decline in imports. By region, Japan’s exports to the US declined 1.8%, led by cars and construction machinery, while exports to China and Europe also fell 0.6% and 5.2%, respectively.After launching his tariff campaign in March with 25% duties on metals, Donald Trump added a tax on auto imports at the same rate from April, along with a baseline tax of 10% on all other Japanese goods that will rise to 24% this summer, barring a trade deal.
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