Japan WED

Akira Ito
18 Jun, 2025
Tokyo

Investors bid up stocks in Tokyo despite the latest batch of economic updates falling short of market expectations. 

The Nikkei 225 Stock Average edged up 0.7%, and the broader Topix inched higher 0.1% as investors reviewed international trade data.

 

Japan's Trade Deficit Jumps in May

Japan's exports decreased 1.7% from a year ago to a four-month low of 8.1 trillion yen, the Ministry of Finance reported Wednesday. 

Shipments to the U.S. declined 11% and fell for the second consecutive month amid weakening demand for vehicles, industrial parts, and advanced semiconductor equipment. 

Exporters are bracing for a wider fallout if the U.S. imposes the proposed 25% tariffs on Japanese vehicles and steel products on July 9. 

Imports declined 7.7% to 8.7 trillion yen, the sharpest decline since January 2024. 

Imports from the U.S. dropped 13.5% amid lackluster demand and partly due to the impact of U.S. tariffs. 

Trade deficit in the month expanded to 637.6 billion yen or $4.4 billion from 115.6 billion yen or $803 million in April, largely driven by the decline in auto-related shipments to the U.S. 

 

Volatile Core Machinery Orders Declined in April

Japan's core machinery orders, which exclude volatile ships and electric power plants, declined from the previous month in April, the Cabinet Office reported Wednesday.

Core machinery orders are volatile on a month-to-month basis, but they are a key indicator of the trajectory of capital spending over the next six to nine months. 

Core machinery orders dropped 9.9% from the previous month and rose 6.5% from a year ago to 919 billion yen. 

Orders from the non-manufacturing sector plunged 11.8% to 470.8 billion yen, and the manufacturing sector decreased 0.6% to 457 billion yen. 

 

Business Sentiment Index Confirms Waning Confidence

The Reuters Tankan Index, a measure of business sentiment, eased for the second consecutive month in June. 

The index eased to +6 in June from +9 in April and +8 in May, the Bank of Japan's survey conducted by Reuters reported Wednesday. 

Business sentiment has been waning since the U.S. launched a global tariff war in mid-February, and the looming 25% tariffs on Japanese auto exports also weighed on the business outlook.

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average gained 0.7% to 38,810.15, and the CSI 300 index increased 0.1% to 3,873.90. 

Toyota Motor Corp. rose 1.2% to ¥2,569.50, Honda Motor Co. Ltd. added 0.4% to ¥1,440.50, and Nissan Motor Co. advanced 1.3% to ¥358.80. 

Nippon Yusen KK declined 0.6% to ¥5,081.0, Kawasaki Kisen Kaisha Ltd. added 0.07% to ¥2,061.50, and Mitsui O.S.K. Lines decreased 2% to ¥4,824.0.