Japan’s exports log biggest drop in 4 years as US tariff impacts intensify

TOKYO: Japan’s exports posted the biggest monthly drop in about four years in July, government data showed on Wednesday, as the impact of US tariffs intensified, raising concerns about the outlook for the export-reliant economy.

Total exports from the world’s fourth-largest economy dropped 2.6% year-on-year in July in value terms, the biggest monthly drop since February 2021, when exports fell 4.5%. It was larger than a median market forecast for a 2.1% decrease and marks a third straight month of decline after a 0.5% drop in June.

Despite the plunge in the value of exports, shipment volumes have so far held up as Japanese exporters have avoided major price hikes, said Takeshi Minami, chief economist at Norinchukin Research Institute.

“But they would eventually have to pass on costs to US consumers and that would further hamper sales in the coming months,” he said.

Exports to the United States in July fell 10.1% from a year earlier, with automobiles slumping 28.4% and automotive components down 17.4%.