Japan’s September Trade Deficit Narrows to ¥536.6 Billion as Export Growth Misses Forecasts

• Japan’s September trade deficit was ¥536.6 billion, narrower than August but above forecasts.
• Exports grew 16.7% for the 13th straight month, missing expectations.
• Deficit narrowing partly due to oil import delays, potentially reversing in October.

Japan’s Ministry of Finance announced a merchandise trade deficit of ¥536.6 billion for September, a notable reduction from August’s ¥1,111.9 billion shortfall, yet still exceeding the market forecast of ¥181.0 billion. Exports increased by 16.7% year-on-year to ¥10.972 trillion, marking the 13th consecutive month of growth, though this figure fell short of the 20.1% expectation and represented the second consecutive month of missed export forecasts. Imports rose 18.9% to ¥11.508 trillion, also below the 19.6% forecast. The narrowing of the deficit was partly attributed to delays in crude oil arrivals due to Houthi rerouting, suggesting a potential rebound in import bills for October. Despite the misses, the sustained export growth, partly driven by AI chip demand, and firms passing on higher costs, are seen by some as broadly supportive for the yen and the Bank of Japan’s tightening considerations.