Japan's Trade Deficit Widens to $18 Billion in January Amid Tariff Concerns

TOKYO (AP) — Japan's trade deficit surged 60% year-over-year to 2.76 trillion yen ($18 billion) in January, the Finance Ministry reported Wednesday, fueling concerns over looming tariffs from the Trump administration.

Despite a trade surplus with the U.S., the wider deficit was driven by a surge in imports, which rose 16.7% to 10.62 trillion yen ($70 billion). Machinery, computers, and foodstuffs all saw increased imports as the yen weakened against foreign currencies.

However, exports also grew, rising 7% to 7.86 trillion yen ($52 billion). The increase was broad-based, encompassing sectors such as machinery, medical goods, and ships.

Japan maintains a trade surplus with the U.S. of around 477 billion yen ($3 billion), primarily due to increased exports of electrical equipment, cars, and raw materials. The Trump administration has not yet exempted Japan from its proposed steel and aluminum tariffs, adding to the uncertainty surrounding the trade relationship.

Analysts note that Japan's economic recovery remains fragile, with the recent trade data providing mixed signals. "The modest increase in exports is a positive sign, but the potential impact of U.S. tariffs remains a major concern," said Min Joo Kang, senior economist at ING.