Japan’s trade figures released Wednesday by the government showed a continuation of deficit conditions at the fiscal-year level, even as a stronger March helped lift the monthly surplus. The Finance Ministry said the country’s trade deficit totaled 1.7 trillion yen ($10.7 billion) in the fiscal year that ended in March, marking the fifth straight year in deficit.
The ministry said exports rose 4% from the previous year while imports increased 0.5% during the same fiscal period, a pattern that left Japan short on net trade despite an overall gain in shipments. Japan’s report also pointed to the way shifting U.S. policy continues to ripple through supply chains tied to export demand.
The report linked part of that pressure to higher U.S. tariffs under President Donald Trump, saying they have hit auto exports and other manufacturers. It said Japan’s overall exports to the United States fell 6.6% in the last fiscal year, with shipments of autos dropping 16%.
In the same context, the report said some Japanese automakers have adjusted production locations to reduce exposure to policy shifts affecting where vehicles are sold. It said Japan’s auto giants, including Toyota Motor Corp., have moved much of their production to other countries where the vehicles are sold, while some automakers still export a large share of vehicles to the U.S. from Japan.
The government also highlighted March’s improvement in trade performance. The ministry said Japan’s trade surplus rose 26% in March from a year earlier, and it reported exports jumped nearly 11.7% in March while imports rose almost 10.9%.
The report tied the broader trade picture to energy constraints as well, citing worries about disruptions to oil shipments from the Middle East amid the war involving Iran. It said Japan imports nearly all of its oil and gas, and that shortfalls could affect production of naphtha-related products used for medical supplies and other plastics.
To address the risk of supply disruptions, the report said Japan’s government pointed to the country’s 254-days of oil reserves for emergencies that were established after the so-called “oil shock” of the 1970s. It said the government is releasing some reserves to stabilize supplies.
Japan is also working on alternative routes for oil and gas shipments, the report said, adding that the main supply route for much of Asia’s oil and gas—effectively the Strait of Hormuz—has been closed because of the war.