Japan’s 2025 trade deficit narrowed to $17 billion, driven by rising exports and slower import growth.

Japan recorded its fifth straight annual trade deficit in 2025, with a preliminary shortfall of 2.65 trillion yen ($17 billion), down nearly 53% from the previous year, as exports rose 3.1% and imports grew less than 1%. In December, Japan posted a 105.7 billion yen trade surplus, down 12% from the prior year, with exports up 5.1% and imports rising 5.3%. U.S. exports fell 11% in December amid a 15% tariff, while shipments to Britain, Africa, and parts of Asia increased. Imports from Europe remained strong. China’s export restrictions on rare earths, imposed after remarks by Prime Minister Sanae Takaichi on Taiwan, raised concerns for Japanese automakers. Despite inflation and stagnant wages, Japan’s economy remained resilient, with the Nikkei index reaching new highs.