FX.co ★ Japan’s Trade Gap Narrows Sharply But Misses Forecasts

Japan experienced a notable reduction in its trade deficit in April 2025, narrowing to JPY 115.85 billion from JPY 504.69 billion recorded in April 2024. Despite this improvement, the outcome fell short of market forecasts, which anticipated a surplus of JPY 227.1 billion. Export activities expanded by 2% year-on-year, reaching JPY 9,157.16 billion. This marks the seventh consecutive month of export growth, even though it was the slowest increase in this period due to challenges posed by heightened U.S. tariffs. On the other hand, imports declined by 2% to JPY 9,273.00 billion, contrasting with a 1.8% rise observed in March and highlighting the second monthly drop this year. Nevertheless, this decrease was not as pronounced as the expected 4.5% reduction.