Updated as of November 2005

Japan Still Supplier to the World.

The value of exports in 2004 reached a historic high of $538.5 billion, up 20.4 percent from the previous year. The major items contributing to this surge were machine equipment for the U.S., E.U. (including 10 additional nations which newly joined the European Union as of May 2004), China, and ASEAN 4 (Indonesia, Malaysia, the Philippines and Thailand). Both a strong yen and a world economic upturn played a part.

On the other hand, 2004 imports also reached a high of $406.5 billion, up 19.1 percent from the previous year. This increase was led by the import of fossil fuels, including crude oil whose price hit a historic high. Also, the amount of machine equipment and component imports, including electronic parts and semiconductors, increased, leading to Japan's economic recovery and thus contributing to a stable domestic market.

The trade balance reached $132 billion, a $25.9 billion dollar increase from the previous year. Thus, the trade surplus has grown continuously for 3 years, starting in 2001.

Trade statistics for 2004 showed increased trade relations, particularly between Japan and Asian countries. For instance, in 2004, 48 percent of Japan’s total exports were shipped to Asia, up from 34 percent in 1991, while the proportions of those to the U.S. and the E.U. both slipped 5 percent.

Exports of general machinery were outstanding in 2004, amounting to $116.5 billion, an increase of 22.7 percent from the previous year. Those of transportation equipment, including automobiles, showed a healthy trend, totaling $130.4 billion, the largest export sector with an increase of 14.2 percent from 2003.

At the same time, imports of IT and machinery components and devices such as semiconductor parts, ICs, and automatic data-processing machines from China and ASEAN increased due to plants transferring production to countries with cheaper labor. Furthermore, imports of textile products, chemicals and foods constituted a 38.7 percent gain.

Japan’s status as the primary international trading partner to all countries remained intact, thanks to the continued vigorous activities of major trading companies, which remain as a unique phenomenon of Japan’s international business. The share of international trade by the trading companies, however, has been gradually decreasing due primarily to the increase of direct import and export by the manufacturers themselves as they integrate their international operations under their own umbrella.