Exports rose 14.8% year-over-year in April, marking the eighth consecutive month of growth and significantly exceeding market expectations, according to Finance Ministry data released Thursday. Imports increased 9.7% from a year earlier, while the country recorded a trade surplus of 301.9 billion yen ($1.9 billion), reversing a deficit posted during the same month in 2025.

The dominant driver behind the export growth was surging global demand for semiconductors and artificial intelligence infrastructure. Shipments of semiconductors climbed nearly 42% by value compared with a year earlier, reflecting continued strength in global technology investment cycles.

Semiconductor Demand Strengthens Export Momentum

Japan’s export performance highlighted the country’s growing role in the global semiconductor supply chain as demand for AI-related hardware continued to accelerate across major markets.

Exports to China increased 15.5% in April, while shipments to the United States rose 9.5%, supported by stronger overseas demand for electrical machinery, medical products, and industrial components. Imports from China rose 15%, while imports from the U.S. jumped 23%, according to government trade figures.

Analysts said the weak yen also supported export competitiveness by making Japanese products more attractive abroad. The Japanese currency has remained under pressure amid diverging monetary policy expectations between the Bank of Japan and the U.S. Federal Reserve.

Oil Supply Disruptions Continue to Pressure Imports

Despite the stronger trade performance, energy supply risks remained a significant concern for Japan’s economy due to the ongoing conflict involving Iran and disruptions to shipping routes through the Strait of Hormuz.

Japan’s oil imports fell nearly 50% by value in April, while imports of liquefied natural gas declined 20%, according to government data. The Strait of Hormuz remains a critical route for Asian energy imports and has faced severe disruption amid regional tensions.

Japan imports almost all of its crude oil, with more than 90% traditionally sourced from the Middle East. Rising crude prices and a weaker yen have sharply increased import costs for energy-dependent industries.

Prime Minister Sanae Takaichi has ordered the release of strategic petroleum reserves to stabilize domestic supply conditions and ease pressure on manufacturers dependent on petroleum-derived products such as naphtha.

Economic Outlook Faces Mixed Pressures

The stronger-than-expected trade data follows recent figures showing Japan’s economy expanded at an annualized rate of 2.1% during the first quarter, supported by consumer spending and exports.

However, economists warned that prolonged energy market instability could eventually weigh on industrial output, household spending, and business confidence. Rising input costs have already increased concerns across sectors reliant on petrochemicals and imported fuel.

Industry analysts also noted that the recent slowdown in machinery orders and weaker services activity may signal that elevated energy prices are beginning to affect broader economic momentum.

Japan’s government has sought to reassure markets by emphasizing the country’s strategic energy reserves and efforts to diversify oil import routes away from the Persian Gulf.

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Published Time 08-12-2025, 18:45

Global financial markets mostly advanced on Tuesday after U.S. President Donald Trump announced a 90-day delay in increasing tariffs on Chinese goods. This move has temporarily eased trade tensions between the world’s two largest economies, encouraging investors amid ongoing uncertainty.

Global Markets React Positively to Tariff Delay

In Europe, France’s CAC 40 inched up 0.1% to 7,706.59, while Britain’s FTSE 100 gained 0.3%, reaching 9,154.82. Germany’s DAX experienced a slight dip of 0.4%, closing at 23,990.54. U.S. stock futures also reflected cautious optimism, with the S&P 500 and Dow Jones Industrial Average futures up by approximately 0.1%.

Asian markets demonstrated stronger gains, led by Tokyo’s Nikkei 225, which surged 2.2% to close at 42,718.17, surpassing its previous all-time high. Japanese corporate shares rallied on the news that U.S. tariffs on imports from Japan would be fixed at 15%, avoiding “stacking” on existing duties.

Toyota Motor Corp. shares jumped nearly 3%, while Honda Motor Co. rose 2.6%. Tokyo Electron and Sharp recorded gains of 1.1% and 11% respectively. Notably, Sanrio, the company behind Hello Kitty, saw its shares climb 16%, and watchmaker Seiko added nearly 14%.

Hong Kong’s Hang Seng Index increased by 0.3% to 24,969.68, and China’s Shanghai Composite rose 0.5% to 3,665.92, buoyed by positive trade developments.

Trade War Tensions Temporarily Eased

President Trump’s executive order on Monday paused the planned tariff hike on Chinese goods, initially set to increase from 30% to a higher rate. The delay allows both countries additional time to negotiate a broader trade agreement. Without the extension, Beijing was expected to retaliate with increased tariffs on U.S. exports.

China responded by issuing a statement endorsing the tariff pause, highlighting both nations’ commitment to ongoing talks. Despite the reprieve, uncertainty lingers for businesses, as the potential for renewed escalation remains.

Stephen Innes, Chief Global Market Strategist at SPI Asset Management, explained, “The extension isn’t about goodwill; it’s about keeping oxygen in the room for deals that matter,” emphasizing the strategic nature of the delay rather than a permanent resolution.

Mixed Regional Market Movements

Elsewhere in Asia, Australia’s S&P/ASX 200 rose 0.4%, closing at 8,880.80, while South Korea’s Kospi fell 0.5%, ending at 3,189.91. These mixed results reflect varying regional sensitivities to global trade dynamics.

In the U.S., stocks experienced a mild pullback on Monday, with the S&P 500 down 0.3%, the Dow Jones Industrial Average falling 0.5%, and the Nasdaq Composite decreasing 0.3%.

Inflation Data in Focus Amid Trade Uncertainty

Investors are awaiting a key report on U.S. inflation, due later Tuesday. Economists predict a 2.8% year-over-year increase in consumer prices for July, slightly above June’s 2.7% figure. Rising costs in groceries, gasoline, and other essentials continue to pressure household budgets.

Although inflation has significantly cooled from its peak of over 9% three years ago, it remains above the Federal Reserve’s 2% target. The ongoing tariff disputes risk further price increases, intensifying fears of “stagflation”—a scenario where economic growth stalls while inflation stays high.

The Federal Reserve faces a difficult balancing act, as measures to control inflation, such as raising interest rates, could potentially weaken the job market and economic growth.

Energy and Currency Markets Update

In commodity markets, benchmark U.S. crude oil prices edged lower by 16 cents to $63.80 per barrel, while Brent crude slipped 9 cents to $66.54 per barrel.

Currency trading saw the U.S. dollar strengthen slightly against the Japanese yen, moving from 148.15 to 148.46 yen. The euro dipped marginally to $1.1617 from $1.1618, reflecting ongoing market volatility amid global economic uncertainty.

Source: AP News – Global shares advance on relief that Trump is delaying higher China tariffs

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