In February 2025, Japan’s economy continued to record positive signals, driven mainly by broad-based wage increasesand a surge in international tourism.
Results from spring labor negotiations indicated an average wage growth of over 5%, including both seniority-based and base salary increases.
1. Japan’s Overall Economic Situation
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A notable development this year is that small and medium-sized enterprises (SMEs) achieved wage increases nearly equivalent to large corporations. This trend highlights intensifying labor competition due to a structural labor shortage.
The income improvement has boosted consumer purchasing power, reflected in the growth of retail sales and service consumption nationwide.
Tourism also showed strong momentum, welcoming approximately 3.26 million international visitors in February. Although slightly lower than in January due to seasonality (Lunar New Year holidays), the number remained higher than the previous quarter.
Most tourists came from East Asia (China, South Korea, Taiwan, Hong Kong) and ASEAN, contributing significantly to spending in hospitality, dining, and retail sectors.
However, external risks persist. The U.S. tariff policy on imported goods may weaken Japan’s export competitiveness. Additionally, the stronger yen since early 2025 has mixed effects—reducing import costs but making exports, especially automobiles and electronics, less attractive.
Domestic inflation pressure remains present, particularly in the food sector, as higher labor costs and supply chain disruptions keep consumer prices above the Bank of Japan’s 2% target.
2. Economic Outlook for Late 2025 and 2026
Japan’s medium-term outlook remains optimistic, supported by rising domestic demand fueled by wage hikes and a robust recovery in service and tourism consumption.
The number of international tourists is projected to reach 46 million in 2025, generating substantial revenue from shopping, accommodation, and entertainment.
If U.S.–China trade tensions do not escalate further, Japan’s exports—particularly in automobiles and machinery—could rebound gradually.
However, companies continue to face pressure to sustain competitive wages amid an aging population and labor shortages. In the long term, this may affect corporate profitability unless productivity improves or digital and automation technologies are effectively adopted.
The Japanese government is expected to maintain a moderately accommodative monetary policy, while promoting digital transformation, renewable energy investment, and tourism infrastructure.
These measures aim to control inflation and sustain domestic growth, enhancing Japan’s global competitiveness amid international uncertainties.
3. Foreign Trade of the Kinki Region – February 2025
According to data from Japan Customs, the total trade turnover of the Kinki region in February 2025 reached JPY 3,207,766 million (USD 20.86 billion).
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Exports: JPY 1,819,561 million (USD 11.83 billion), up 10.7% year-on-year, accounting for 19.8% of Japan’s total exports.
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Imports: JPY 1,388,185 million (USD 9.03 billion), down 4.18% year-on-year, representing 16.1% of Japan’s total imports.
Trade by destination/source:
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United States: Exports JPY 295,776 million (+1.78%); Imports JPY 137,842 million (–5.57%).
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European Union: Exports JPY 160,441 million (–4.96%); Imports JPY 176,317 million (+13.56%).
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Asia (total): Exports JPY 1,177,960 million (+18.18%); Imports JPY 751,330 million (–8.65%).
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China: Exports JPY 413,807 million (+18.05%); Imports JPY 352,613 million (–10.88%).
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ASEAN: Exports JPY 313,079 million (+14.26%); Imports JPY 240,874 million (–9.86%).
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4. Vietnam–Japan and Vietnam–Kinki Trade Relations – February 2025
The total bilateral trade turnover between Vietnam and Japan in February 2025 reached JPY 551,003 million (USD 3.58 billion).
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Japan’s exports to Vietnam: JPY 231,702 million (USD 1.51 billion), up 9.6%.
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Vietnam’s exports to Japan: JPY 319,301 million (USD 2.08 billion), up 7.4% year-on-year.
For the first two months of 2025, bilateral trade totaled JPY 1,168,811 million (USD 7.6 billion), with Japan exporting JPY 408,169 million (USD 2.65 billion) and importing JPY 760,642 million (USD 4.95 billion) from Vietnam.
Vietnam–Kinki Regional Trade
In February 2025, two-way trade between Vietnam and Kinki reached JPY 124,051 million (USD 807 million).
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Exports from Kinki: JPY 65,491 million (USD 426 million), up 33.83%, accounting for 3.6% of Kinki’s total exports.
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Imports from Vietnam: JPY 58,560 million (USD 381 million), down 3.24%, accounting for 4.22% of Kinki’s total imports.
Cumulatively for the first two months of 2025, total trade between the two sides reached JPY 257,518 million (USD 1.67 billion), including JPY 114,920 million (USD 750 million) in exports from Kinki and JPY 142,598 million (USD 930 million) in imports from Vietnam.
5. Summary
Kinki’s export performance continued its five-month growth streak, while imports rose for three consecutive months.
Exports to Asia have increased continuously for 12 months, with EU and China markets also growing for the last three months.
Similarly, imports from these regions have expanded for three consecutive months.
Trade between Vietnam and Kinki maintained a positive momentum—exports from Vietnam increased for three consecutive months, and imports from Kinki grew for 13 months straight.
Overall, bilateral trade between Vietnam and Japan, particularly with the Kinki region, is expected to continue its strong upward trajectory in 2025, supported by economic recovery, supply chain diversification, and robust consumer demand in both markets.