Author: Yamazaki Makiko
TOKYO (Reuters) - Japan's exports rose for a third straight month in December as a weak yen boosted shipments, data showed on Thursday, although a decline underscored concerns over the unpredictability of U.S. trade policy doubts about the future.
As U.S. President Donald Trump announced plans to impose tariffs on imports from major trading partners China, Canada and Mexico, Japanese companies are increasingly concerned that protectionist policies could choke off and disrupt global shipping.
Some companies with operations in the United States are preparing to expand operations there, suggesting Japan's exports will take a hit. At the same time, exports to China have been affected by tightening U.S. restrictions on doing business with Asia's largest economy.
"As Trump's tariffs and potential retaliatory measures threaten to upend international trade, we will just have to wait and see what happens," said Takeshi Minami, chief economist at Norinchuk Research Institute.
Government data showed Japan's exports rose 2.8% in December from a year earlier, beating the median market forecast of 2.3% but slowing down from November's 3.8% growth.
Taiwan's demand for chipmaking equipment dominated exports of different types, while the yen's 3.8% decline against the dollar boosted total value.
But exports to Japan's two largest trading partners fell, with exports to China down 3% and exports to the United States down 2.1%.
Imports increased by 1.8% year-on-year in December, compared with market forecasts of 2.6% and a decrease of 3.8% in November.
As a result, Japan's trade surplus in December was 130.9 billion yen ($836.8 million), compared with forecasts of a 53 billion yen deficit.
Japan posted an annual deficit for the fourth consecutive year, with the deficit reaching 5.3 trillion yen, compared with 9.5 trillion yen the previous year.
Annual export growth was 6.2%, and import growth was 1.8%.
Signs of continued wage growth and consequent consumption growth could support the Bank of Japan's case for raising interest rates this week.
But Trump's tariff plans cast a shadow on the outlook for external demand, which could upend international trade and slow China's economic recovery.
A survey by the Japan External Trade Organization shows that most Japanese companies with operations in the United States are preparing for the tariffs by strengthening U.S. manufacturing and sourcing and raising product prices.
However, Koki Akimoto, an economist at Daiwa Research Institute, said it was unlikely there would be any significant tariff impact in the first half of this year because the regulatory process required to implement the changes would take time.
"Japan's exports are likely to remain flat for some time," Akimoto said.
(1 USD = 156.4300 yen)
(Reporting by Makiko Yamazaki; Editing by Kim Coghill and Christopher Cushing)