Japan’s export growth significantly underperformed expectations in September, rising 16.7% against a forecasted 20.1%, marking the second consecutive month of slowdown. While semiconductor and machinery exports showed strong gains, overall shipments to major partners like China (up 8.6%) and the U.S. (up 22.9%) indicate mixed global demand. The data precedes a Bank of Japan meeting next week, where interest rates are expected to remain steady.
Japan's crucial export sector experienced a significant slowdown in September, with growth rising a mere 16.7% from a year earlier. This figure dramatically missed market expectations, as a Reuters poll of analysts had anticipated a more robust 20.1% increase. This marks the second consecutive month that shipments from the world's fourth-largest economy have decelerated, following a near four-year high recorded in July.
IBARAKI, JAPAN - JUNE 17: Technicians at work in the clean room of the Fab Equipment at a semiconductor company, Renesas Technology Corp. on June 17, 2004 in Ibaraki, Japan. Renesas is the first company to produce semiconductor products from 300mm wafer in the world. (Photo by Koichi Kamoshida/Getty Images)
Despite the overall slowdown, certain sectors demonstrated remarkable strength. Semiconductor exports continued their robust performance, surging an impressive 49.4% year-on-year by value. Machinery exports also played a significant role in bolstering growth, with semiconductor-related machinery shipments climbing 43.9% and power generation machinery exports increasing by 22.6%.
Looking at key destinations, shipments to mainland China, Japan's largest trading partner, saw an 8.6% rise. Exports to the United States, another vital market, recorded a more substantial increase of 22.9%.
Exports have been a primary engine for Japan's economic expansion throughout the first two quarters of 2026, contributing significantly to beating expectations in Q1 and supporting growth in Q2. However, the latest figures suggest potential headwinds.
Meanwhile, Japan's imports in September also fell short of forecasts, growing 18.9% against Reuters' expectation of 19.6%. A notable surge was observed in petroleum imports, which climbed 51.1% by value. Inbound petroleum shipments from the U.S. soared by nearly 820%, while those from the Middle East saw a modest 1.5% increase, likely impacted by ongoing regional conflicts.
Following the release of this data, Tokyo's benchmark Nikkei 225 index was up 1.8%, and the Topix gained 1.14%, indicating a mixed market reaction. Investors are now keenly awaiting the Bank of Japan's meeting next week, where Reuters poll estimates suggest the central bank will likely maintain its policy rate steady at 1%.
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