Japan's Economic Recovery Faces Uncertainty Over U.S. Tariff Threats

Japan reports stronger-than-expected GDP growth and rising exports, but trade tensions with the U.S. pose risks to its export-driven economy.

• Japan's economy grew at an annualized rate of 2.8% in the October-December quarter, driven by business spending and increased consumer activity.
• Exports rose 7.2% year-on-year in January, marking the fourth consecutive monthly increase, with strong demand for machinery and medical goods.
• Imports surged 16.7% compared to the previous year, contributing to a trade deficit of 2.76 trillion yen ($18 billion) for January.
• The U.S. remains Japan's largest export market, but proposed tariffs on automobiles and reciprocal trade measures from President Trump could disrupt trade relations.
• Japan is urging the U.S. to exclude it from new tariff policies, as transport equipment, including automobiles, accounts for a significant portion of its exports to the U.S.

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