COUNTRY'S NEWS

Japan’s Economic and Trade Situation and Kansai Region Overview – January 2025

Posted on by content02.vinahugo
09
Oct

Japan’s economic outlook for Q1 2025 remains positive, with GDP growth expected to stay in the positive range. Although inflationary pressures persist, rising household income is likely to support a slight rebound in personal consumption. Meanwhile, business investment is projected to expand thanks to growing machinery orders, and exports may strengthen further as demand from Europe and China improves.

1. Japan’s Economic Performance

In Q4 2024, Japan’s economy recorded a 0.7% quarter-on-quarter growth (equivalent to 2.8% annualized), marking the third consecutive quarter of expansion.
This result exceeded expectations, mainly supported by steady export performance—especially in the services and inbound tourism sectors.

Imports fell 2.1%, positively contributing to GDP growth, while personal consumption increased only 0.1% due to high prices. Corporate investment grew modestly by 0.5%.

Overall, Japan’s GDP in 2024 saw marginal annual growth of only 0.1%, mainly because of:

  • Slight decline in personal consumption (-0.1%)

  • Drop in real estate investment (-2.3%) due to rising property prices and interest rates

  • Slow export growth (+1.0%) versus import expansion (+1.3%)

Despite this, household income increased significantly — nominally +5.8% and +3.3% in real terms — driven by wage hikes and bonuses, providing room for stronger consumption recovery ahead.

Monetary Policy

The Bank of Japan (BoJ) plans to raise the short-term policy rate to 0.75% by mid-2025, and gradually by 0.25% every six months, targeting around 1.50% by the end of the forecast period.

Although interest rates will rise, real interest rates will remain negative, maintaining a relatively loose financial environment to support growth.

However, Japan faces a long-term labor shortage. Increased recruitment and acceptance of foreign workers may ease pressure but could bring social and economic implications.
Investments in human capital and technology are expected to boost productivity and offset workforce declines, contributing to sustainable growth.

2. Trade Situation in the Kansai Region

According to Japan Customs data, the total trade value of the Kinki (Kansai) region in January 2025 reached 3,383.077 billion yen (USD 22 billion).

  • Exports: 1,549.811 billion yen (USD 10.08 billion), up 3.51% year-on-year, accounting for 19.7% of Japan’s total exports.

  • Imports: 1,833.246 billion yen (USD 11.92 billion), up 19.12%, representing 17.3% of total national imports.

Trade by Market

  • United States: Exports 259.169 billion yen (USD 1.69 billion), up .56%; Imports 154.200 billion yen (USD 1.01 billion), up 13.76%.

  • European Union: Exports 144.679 billion yen (USD 0.94 billion), down .43%; Imports 176.509 billion yen (USD 1.15 billion), up 30.58%.

  • Asia (total): Exports 967.930 billion yen (USD 6.29 billion), up 2.77%; Imports 1,120.944 billion yen (USD 7.29 billion), up 20.26%.

  • China: Exports 317.745 billion yen (USD 2.07 billion), down 11.82%; Imports 604.792 billion yen (USD 3.93 billion), up 19.56%.

  • ASEAN: Exports 306.690 billion yen (USD 1.99 billion), up 31.6%; Imports 283.161 billion yen (USD 1.84 billion), up 15.14%.

3. Trade Relations between Vietnam – Japan and Vietnam – Kansai (January 2025)

In January 2025, the total bilateral trade turnover between Vietnam and Japan reached 617.808 billion yen (USD 4.02 billion).

  • Japan’s exports to Vietnam: 176.467 billion yen (USD 1.15 billion), up 8.8%.

  • Vietnam’s exports to Japan: 441.341 billion yen (USD 2.87 billion), up 30% year-on-year.

According to the Kinki regional customs, bilateral trade between Vietnam and the Kansai region totaled 133.467 billion yen (USD 868 million) in January 2025.

  • Kansai’s exports to Vietnam: 49.429 billion yen (USD 321 million), up 44.29%, accounting for 3.19% of the region’s total exports.

  • Kansai’s imports from Vietnam: 84.038 billion yen (USD 546 million), up 23.22%, representing 4.58% of total imports.

Cumulative Trade

In the first month of 2025, total trade between Vietnam and Kansai reached 133.467 billion yen (USD 0.87 billion), with Kansai’s exports at 49.429 billion yen (USD 0.32 billion) and imports from Vietnam at 84.038 billion yen (USD 0.55 billion).

Trade Trends

  • Kansai’s exports have grown for four consecutive months, and imports for two consecutive months.

  • Exports to Asia rose for 11 consecutive months, to the U.S. for eight months, while imports from the U.S. have increased for four months.

  • Exports from Vietnam to Kansai have risen for three consecutive months, and imports for 12 consecutive months.

Overall, bilateral trade between Vietnam and Kansai, and between Vietnam and Japan as a whole, continues to show strong growth momentum in early 2025.