Japan reported a trade deficit for the fiscal year ended in March, marking the fifth straight year of deficits even as a monthly rebound pointed to uneven movement in exports, officials said. The Finance Ministry reported that Japan’s exports rose 4% while imports increased 0.5% over the fiscal year, leaving the deficit at 1.7 trillion yen ($10.7 billion), according to the government’s figures released Wednesday.
The deficit comes as higher tariffs from U.S. President Donald Trump continue to affect Japan’s exporters, particularly automakers. Japan’s overall exports to the United States fell 6.6% in the last fiscal year, with shipments of autos dropping 16%, the Finance Ministry said, reflecting how trade policy shifts can hit specific industrial supply chains.
In contrast, Japan’s March data showed a turn toward surplus after a difficult period. The government said Japan’s overall trade surplus rose 26% in March from a year earlier, with exports up nearly 11.7% and imports up almost 10.9%. The monthly improvement suggested the export sector was recovering from last year’s shocks, even as the broader fiscal-year picture remained weak.
Automakers have responded to tariff uncertainty by changing where vehicles are produced. The AP report said auto giants such as Toyota Motor Corp. have moved much of their production to countries where the vehicles are sold, aiming to avoid direct damage from policy shifts—while noting that some automakers still export a large share of their vehicles to the U.S. from Japan.
Japan also faces supply risks tied to energy. Japan imports nearly all of its oil and gas, and the war with Iran has raised concerns about disruptions to oil shipments from the Middle East. The report said that beyond power and transport impacts, shortages of oil can affect production of naphtha-related products that are used in medical supplies and other plastics.
To address that risk, the Japanese government said it has prepared emergency inventories. The government pointed to 254 days of oil reserves established after the “oil shock” of the 1970s, and said it is releasing some reserves to help stabilize supplies.
Japan is also working on alternative routes to move energy shipments rather than relying on the Strait of Hormuz, which is described in the report as effectively closed because of the war. The approach reflects how geopolitical disruptions can quickly translate into economic and industrial stress—especially for economies dependent on imported fuel.