Japan’s trade data for February revealed a mixed but resilient picture, with exports rising 4.2% yoy to JPY 9,572B, comfortably above expectations. Imports also strengthened, up 10.2% yoy to JPY 9,514B, resulting in a trade surplus of JPY 57.3B. While overall export growth remained solid, the underlying composition points to a significant realignment in demand.
Shipments to China declined -10.9% yoy. Exports to the U.S. fell -8%, driven in part by a sharp -14.8% drop in auto exports.
In contrast, exports to other regions showed strong momentum. Hong Kong saw a surge of 32.3%. Southeast Asia recorded a 5.1% increase, with the regional bloc overtaking China as Japan’s second-largest export destination.
Western Europe also provided support, with shipments rising 17.5% on strong demand from Germany and the U.K.
The data suggests Japan’s exporters are increasingly diversifying away from traditional markets, a shift that may help cushion the impact of global economic fragmentation.
