Japan’s trade deficit narrowed sharply to JPY 378.7 billion in May 2026 from JPY 662.5 billion a year earlier, beating market expectations of a JPY 564.6 billion shortfall, as export growth outpaced imports. On an annual basis, exports rose 17.0% to JPY 9,511.5 billion, up from 14.8% in April and marking the fastest expansion since November 2022, above the consensus forecast of 16.2%. This strong performance was driven by firm demand from China, the U.S., ASEAN economies, and the EU.
Imports climbed 12.5% year-on-year to JPY 9,890.2 billion, accelerating from a 9.8% increase in April but slightly below expectations of 12.8%. It was the fourth consecutive monthly rise in imports and the quickest pace since January 2025, underpinned by resilient domestic demand following the government’s large-scale stimulus measures introduced in late 2025.
