Shipments to the US rose 9.5% while exports to China climbed 15.5%, providing a broad geographic base to the outperformance. Imports grew 9.7%, also clearing the 8.3% forecast, and the combination produced a trade surplus of 301.9 billion yen against expectations of a 29.7 billion yen deficit.
The composition of the import data, however, carries a warning. Crude oil import volumes collapsed 64% in April, the steepest fall since 1980 according to a finance ministry official, with the value decline of 49.9% the largest since the depths of the COVID-19 pandemic in November 2020. Japan has moved to diversify crude procurement by sourcing additional supplies from the United States and other non-Middle Eastern producers, but the offset has been partial at best. Export resilience has been supported in part by domestic production drawing on Japan’s substantial strategic oil reserves, a buffer that cannot be sustained indefinitely.
Analysts at SMBC Nikko Securities, cited by Reuters, cautioned that the picture is likely to deteriorate. Beyond higher crude prices, costs across petroleum-related products including naphtha are rising, and trade deficits are expected to widen as those pressures feed through. Prolonged disruption to Middle Eastern supply routes risks raising production costs across energy-intensive sectors such as chemicals while simultaneously dampening global demand, squeezing Japanese exporters from both directions.
The trade data landed alongside a softer machinery orders print, with core orders falling 9.4% month-on-month in March against a forecast of 8.1%, and a flash PMI for May showing manufacturing growth slowing and services stalling entirely for the first time in over a year.
Separately, JNN reported that Tokyo is considering a supplementary budget of around 3 trillion yen for the current fiscal year, a signal that the government regards the Hormuz closure as a prolonged rather than temporary feature of the economic environment and is preparing its fiscal response accordingly.
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The trade surplus of 301.9 billion yen against a forecast deficit of 29.7 billion yen is a striking beat on the headline, but the composition tells a more complex story. The 64% volume collapse in crude oil imports, the steepest since 1980, reflects supply disruption rather than demand management, and the value decline of 49.9% flatters the trade balance in a way that will not persist if alternative supply sources remain more expensive. Analysts at SMBC Nikko Securities are already flagging that petroleum-related input costs are rising broadly, pointing toward widening trade deficits ahead. Export resilience is being sustained in part by drawdown of strategic oil reserves rather than normalised supply, a buffer with a finite shelf life. The 3 trillion yen supplementary budget under consideration, if confirmed, signals that Tokyo is preparing for the Hormuz closure to be a structural feature of the near-term economic landscape rather than a short-lived disruption.
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JNN is the Japan News Network, a television news network operated by TBS (Tokyo Broadcasting System). It is one of Japan’s major broadcast news organisations and is commonly cited as a sourcing outlet for Japanese government and policy leaks
