Further on the trade data from Japan’s Ministry of Finance:

• Japanese exports rose for a third straight month
• Exports to China -2.4% year/year
• Exports to Asia +4.5%
  year/year
• Exports to US +8.8% year/year (rebounded for the first time in eight months)
• Exports to EU
  +19.6% year/year

The exports numbers are a sign of strength for Japanese industry, a very welcome one. The low yen is a support factor for exports. On the other hand, the low yen appears to be capping imports. November imports improved from October but missed estimates.

The core machine orders data are very positive indeed. Both the m/m and y/y are ahead of the previous month’s solid results, and both have beaten estimates also.

There is nothing in these data releases to dissuade the Bank of Japan from hiking rates this week (see below).

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As I said earlier, the Bank of Japan will begin its two day meeting tomorrow, Thursday, December 18, 2025. On Friday we’ll get the statement followed by Bank of Japan Governor Ueda’s press conference:

• the statement is expected some time in the 0230 to 0330 GMT time window (this is 2230 – 2330 US Eastern time). The BoJ do not have a set scheduled time for the release;
• Bank of Japan Governor Ueda’s press conference will follow at 0630 GMT (this is 0130 US Eastern time).

With tariff risks easing, the BOJ is widely expected to raise rates this week by 25bp, from 0.5% to 0.75%, though the pace of further tightening remains uncertain.

Japan’s economy contracted in the third quarter as exports weakened under the impact of U.S. tariffs, but analysts expect growth to rebound in the current quarter. That view supported by this data today.

The initial tariff shock was less severe than feared, with exporters absorbing costs to protect market share, helped by a weaker yen. Sentiment improved after the U.S. and Japan agreed in September to lower baseline tariffs to 15% on most imports.

With tariff risks easing, the BOJ is widely expected to raise rates this week, though the pace of further tightening remains uncertain.