Japan Posts Fifth Straight Annual Trade Deficit

Japan recorded a 2.65 trillion yen ($17 billion) trade deficit for 2025, marking the fifth consecutive yearly shortfall, the Finance Ministry reported Jan. 22. The deficit was 53% smaller than the previous year's 5.4 trillion yen. Exports rose 3.1% while imports increased less than 1%. December showed a 105.7 billion yen ($669 million) trade surplus, down 12% from a year earlier. Exports to the U.S. fell 11% in December, while shipments to Britain, Africa, Hong Kong and India rose. Imports from Europe remained robust but declined from Brazil and the Middle East. U.S. tariffs on Japanese goods, currently at 15%, have added pressure. Meanwhile, China's rare earth export restrictions threaten Japanese automakers. Prime Minister Sanae Takaichi may call elections next month to bolster her party's standing amid public concerns over inflation and wage stagnation. The Nikkei Stock Average continues to reach new highs.