Japan’s October Exports Beat Estimates on Strong Shipments to Asia and Europe

Japan’s exports rose 3.6% year on year in October, beating expectations for just 1.1% growth, government data showed Friday. The stronger-than-forecast performance was driven by robust demand from Asia and Western Europe, helping offset weaker exports to the U.S.

Shipments to Asia climbed 4.2%, while exports to Western Europe surged 8.8%. Exports to North America fell 2.7%, pulled down by a 3.1% drop in goods sent to the U.S.

Automobile exports to the United States, Japan’s top export category by value, fell 7.5%, but the decline was far softer than September’s steep 24.2% plunge.

The strong export print comes as Japan faces a political dispute with China following Prime Minister Sanae Takaichi’s comments about Taiwan. Analysts warn the impact of the diplomatic rift may appear in next month’s trade data. Some Japanese retailers in China have temporarily closed, while the mainland has reportedly halted seafood imports from Japan.

Separately, Japan’s imports unexpectedly rose 0.7%, defying expectations of a decline. The export rebound offers some relief after Japan’s economy contracted 0.4% in the third quarter, with net exports dragging growth by 0.2 percentage point.

Japan also reported consumer inflation running above the Bank of Japan’s 2% target for the 43rd consecutive month.

Following the data, the Nikkei 225 fell 2.38%, while the yen strengthened slightly to 157.39 per dollar. Finance Minister Satsuki Katayama said she is “alarmed” by recent sharp currency moves, signaling the possibility of market intervention.