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Imports grew 10.2% on-year to 9.51 trillion yen following a 2.5%
contraction in January.
Japan posted a 1.15 trillion trade deficit that month.
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.
Japan imports almost all its oil, and Brent crude — the
international standard — has jumped in recent weeks to about
$100 a barrel.
Geopolitical uncertainty, especially the war in Iran, loom large
for Japan's export-reliant economy, but a weak yen is likely to
work as a plus. The U.S. dollar has been trading at about 159
yen, when it was below 150 yen a year ago.
Shipments to China declined 10.9% from the same month a year
ago, although demand was likely unusually weak due to this
year's Lunar New Year holidays falling in February.
Those to the U.S. dropped 8%, as auto exports fell. President
Donald Trump’s tariffs on Japanese autos, now at 15%, continue
to weigh on Japan’s automakers and auto supply manufacturers.
Exports to Europe held up, growing 17% in February from the same
month a year ago. Exports to the rest of Asia also grew, by
2.8%.
Investors are eyeing what the Bank of Japan might do on interest
rates as the central bank’s policy board concludes its two-day
meeting Thursday.
“Central banks are waiting to see if 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,” said Tim Waterer, chief market analyst at KCM Trade.
Investors are also closely watching what deals, if any, could
come from the summit later this week between Trump and Sanae
Takaichi, Japan's first woman prime minister.
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