Japan posts trade surplus in February as exports rise, China demand soft

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Japan recorded a trade surplus of 57.3 billion yen ($360 million) in February, reversing from a deficit the month before, according to preliminary seasonally adjusted data released by Japan’s Finance Ministry on Wednesday. The figures showed exports rising faster than imports, producing the month’s positive trade balance.

The Finance Ministry’s preliminary report showed exports grew 4.2% year-on-year in February to 9.57 trillion yen. Imports increased 10.2% year-on-year to 9.51 trillion yen after a 2.5% contraction in January, when Japan posted a 1.15 trillion trade deficit.

The February export growth came amid demand softness from China. Shipments to China declined 10.9% from the same month a year earlier, which the report said likely reflected unusually weak demand because this year’s Lunar New Year holidays fell in February.

In the U.S. market, shipments also fell. The data showed exports to the United States dropped 8% from a year earlier, with the report attributing part of the pressure to auto exports affected by President Donald Trump’s tariffs on Japanese autos, which the report said are at 15%.

The report also pointed to oil and energy-price risk as a factor that could affect future trade costs. It said import costs are likely to rise as the effective closure of the Strait of Hormuz due to the war against Iran drives up oil and other energy prices, noting Japan imports almost all its oil and that Brent crude had jumped in recent weeks to about $100 a barrel.

Currency trends were described as another near-term swing factor for Japan’s export-focused economy. The report said the U.S. dollar was trading at about 159 yen, compared with below 150 yen a year earlier, and described the weaker yen as likely to help.

Investors, the report added, were also focused on what the Bank of Japan might do on interest rates as the central bank’s policy board concluded its two-day meeting on Thursday. The report said elevated oil prices were part of what investors were weighing when considering whether central banks might shift from a dovish to a hawkish stance.

Tim Waterer, chief market analyst at KCM Trade, said central banks were waiting to see whether “these elevated oil prices are a temporary blip or a running theme for 2026, in which case we may see more global peers pivot from a dovish to a hawkish stance.”

Japan’s trade developments were being watched alongside potential policy and diplomatic signals, including deals that could come from a summit later this week between Trump and Sanae Takaichi, the report said. It also reported that exports to Europe held up, growing 17% year-on-year in February, and that exports to the rest of Asia rose 2.8%.