By Takaya Yamaguchi
TOKYO, May 21 (Reuters) – Japanese exports rose for an eighth straight month in April, beating market expectations, bolstered by resilient global demand despite major supply disruptions caused by the U.S.-Israeli war with Iran.
The outcome follows separate data on Tuesday showing Japan’s economy grew at a faster-than-expected annualised pace of 2.1% in the first quarter of 2026, driven by solid exports and consumption, though the momentum is likely to face a severe test this quarter.
Total exports by value rose 14.8% from a year earlier in April, government data showed on Thursday, more than a median market forecast for a 9.3% increase and following a revised 11.5% jump in March.
Exports to the U.S. rose 9.5% from a year earlier, while those to China climbed 15.5%, the data showed.
Imports grew 9.7%, also exceeding market expectations for an 8.3% increase, despite a fall in oil imports.
Crude oil shipments plunged 64% in volume terms, marking the steepest drop since 1980, a finance ministry official said. In value terms, crude oil imports declined 49.9%, the largest drop since November 2020 during the COVID-19 pandemic. An increase in crude oil imports from the U.S. offset part of that.
Japan sought to diversify its crude oil procurement by securing alternative supplies from outside the Middle East, including from the U.S., but that was not enough to fully offset the impact of the conflict.
As a result, Japan ran a trade surplus of 301.9 billion yen ($1.90 billion), compared with the forecast of a deficit of 29.7 billion yen.
“Beyond higher crude prices, the prices of petroleum-related products such as naphtha are also increasing,” said Koya Miyamae, senior economist at SMBC Nikko Securities. “In the future, trade deficits are likely to widen.”
Even though the closure of the Strait of Hormuz boosted energy costs and caused supply disruptions for oil and other inputs, exports remained relatively firm as domestic production continued to rely on existing inventories, supported by Japan’s large strategic oil reserves.
Prolonged disruptions to Middle Eastern supply routes could, however, weigh on both imports and exports by raising production costs and slowing global demand, particularly in energy-intensive sectors such as chemicals, analysts said.
Meanwhile, separate data showed Japan’s core machinery orders dropped 9.4% in March from the previous month, down for the first time in two months and a bigger fall than a median market forecast of an 8.1% decline.
Another private-sector survey showed relatively subdued business activity. Japan’s manufacturing activity slowed slightly in May, while service sector growth ground to a halt for the first time in over a year, as surging costs linked to the Middle East conflict weighed on confidence.
($1 = 158.8800 yen)
(Reporting by Takaya Yamaguchi, Writing by Makiko Yamazaki and Kaori Kaneko; Editing by Thomas Derpinghaus, Chang-Ran Kim and Jacqueline Wong)
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