Japan's trade deficit shrinks 44% in 2024 on record exports

Japan's trade deficit in 2024 shrank 44 percent from a year earlier to 5.33 trillion yen ($34 billion), as exports hit a record high due to robust vehicle and semiconductor-related demand, government data showed Thursday, Kyodo reports. 

While exports rose for the fourth straight year, Japan's trade balance also remained in the red for the fourth consecutive year, as elevated energy prices in recent years increased import costs for resource-scarce Japan.

Overall exports grew 6.2 percent from the year before to 107.09 trillion yen, the highest since comparable data became available in 1979, buoyed by chip-making equipment shipments to China and U.S.-bound hybrid vehicles, the Finance Ministry said.

Imports climbed 1.8 percent to 112.42 trillion yen, up for the first time in two years, driven by personal computers from the United States and copper ore from Chile, the ministry said in a preliminary report.

In 2024, the yen averaged 150.97 against the U.S. dollar, 7.7 percent weaker than the previous year, according to the ministry.

"While a weak yen increased both exports and imports in value terms, imports were curbed by lower crude oil, coal and natural gas prices (compared with 2023), leading to an improvement in the trade balance," said Ryotaro Tsuchiya, an economist at Mizuho Securities Co.

But the improvement in Japan's trade balance may slow this year if new U.S. President Donald Trump imposes higher import tariffs as promised during his presidential campaign, Tsuchiya added.

Japan had a trade surplus of 8.64 trillion yen with the United States in 2024, down 0.7 percent from the previous year, as exports rose 5.1 percent to 21.30 trillion yen and imports jumped 9.5 percent to 12.65 trillion yen.

With China, Japan ran a 6.44 trillion yen trade deficit, down 3.4 percent and marking the first reduction in three years, with exports rising 6.2 percent to 18.87 trillion yen and imports expanding 3.6 percent to 25.30 trillion yen.

Japan's trade surplus with the rest of Asia, including China, surged more than sixfold to 3.03 trillion yen.

The country remained in the red for the 13th straight year with the European Union, logging a trade deficit of 1.89 trillion yen.

For December alone, Japan reported a 130.9 billion yen trade surplus, the first black ink in six months.

Exports in the reporting month increased 2.8 percent to 9.91 trillion yen and imports grew 1.8 percent to 9.78 trillion yen from a year earlier.

Earlier it was reported that an earthquake with a magnitude of 5.2 jolted Fukushima Prefecture and nearby areas earlier today.