Japan's Exports Surge, US Trade Deal Unveiled

Japan's exports surged by 16.8% in January, exceeding market expectations and growing at their fastest rate since November 2022. Shipments to China jumped 32%, while those to the U.S. fell 5%. The growth was driven by a 26% jump in shipments to Asia and over 25% to Western Europe. Imports fell 2.5% year on year, compared to Reuters estimates of a 3% rise. The strong export growth is a welcome start to the year after Japan's exports growth declined to 3.1% last year. The Japanese economy expanded by just 0.1% year on year in the fourth quarter, supported by private demand, but net exports shaved 0.8 percentage point off growth. The U.S. and Japan have announced a trade deal, with Japan pledging to invest $550 billion in the U.S.

The US government announced that Japan will invest $36 billion in three projects in the United States, marking the first phase of a $550 billion commitment made under a trade agreement last year. The projects include a natural gas plant in Ohio, a crude oil export facility along the US Gulf Coast, and a synthetic diamond manufacturing site in Georgia. The investments are seen as a way for Japan to maintain a positive trade relationship with the US, particularly under the Trump administration, and to avoid potential tariffs.

The US and Japan have unveiled a series of energy and critical minerals projects worth approximately $36 billion as part of a trade deal between the two countries. The projects include a power plant in Ohio, a deepwater crude oil export facility in Texas, and a synthetic industrial diamond manufacturing site in Georgia. Japanese Prime Minister Sanae Takaichi and US President Donald Trump announced the deals, which aim to enhance economic security and reduce reliance on foreign sources, particularly China. The investments are part of a larger $550 billion commitment by Japan under the trade deal. Trump claimed the projects would 'end our foolish dependence on foreign sources,' while Takaichi stated that they would strengthen Japan's ties with the US.