Containers on a cargo ship are pictured at an industrial port in Tokyo, Japan, July 2, 2025. REUTERS/Kim Kyung-Hoon

By Makiko Yamazaki

TOKYO (Reuters) -Japan's exports rose for the first time in five months in September due to a boost from a weak yen, although U.S. shipments continued to fall despite lower U.S. tariffs on Japanese autos that took effect in the month.

The uptick in exports adds to a string of recent data, including the Bank of Japan's tankan business survey, that support a growing view within the central bank that the overall economy is weathering the impact of earlier tariff hikes.

But the outlook for exports remains dim, as U.S.-bound exports will continue to struggle and the yen's depreciation may be corrected, said Takeshi Minami, chief economist at Norinchukin Research Institute.

"The tariff impact has not fully materialised yet as Japanese exporters haven't been able to pass on higher costs. If that adjustment starts to happen, it could further drag down export volumes," he said.

Total exports by value rose 4.2% year-on-year in September, data showed, less than a median market forecast for a 4.6% increase and following a 0.1% drop in August, the data on Wednesday showed.

Exports to the United States fell 13.3% in September from a year earlier, dropping for the sixth consecutive month. Automobiles plunged 24.2% and chipmaking equipment slumped 45.7%.

On the other hand, exports to China were up 5.8%, helped by brisk demand for automobiles and materials. Those to the rest of Asia rose 9.2%.

Imports grew 3.3% in September from a year earlier, compared with market forecasts for a 0.6% increase.

As a result, Japan ran a trade deficit of 234.6 billion yen ($1.56 billion) in September, compared with the forecast for a surplus of 22.2 billion yen.

Washington formalised a trade agreement with Tokyo last month, implementing a baseline 15% tariff on nearly all Japanese imports, down from the initial 27.5% on autos and a 25% duty threatened for most other goods.

The deal gave some relief to Japanese automakers, many of whom had absorbed higher tariff costs by cutting export prices to stay competitive at the expense of profits.

Analysts caution that the prolonged squeeze on profits could dampen corporate investment and wage growth.

"Export-oriented manufacturers may face profit declines, which could affect their ability to raise wages in next year's spring negotiations," Minami said.

"Whether we'll see the strong momentum is uncertain, and that outcome will likely have a significant impact on future consumption trends and monetary policy," he added.

BOJ Governor Kazuo Ueda has signalled the bank's readiness to keep raising still-low borrowing costs if there are enough signs that Japanese firms can weather the tariff hit and boost spending on equipment and wages.

($1 = 150.7800 yen)

(Reporting by Makiko Yamazaki; Editing by Sam Holmes)