Japan's exports rose in May at the fastest pace in four months thanks to increased shipments of cars, car parts, and semiconductor equipment in a sign that global demand is gaining strength.
Exports rose 8.1 percent in May from the same period a year ago, more than the median estimate for a 7.5 percent annual increase expected by economists in a Reuters poll. In April, exports grew an annual 7.8 percent.
Exports are likely to continue to grow thanks to increased demand for manufacturing equipment, cars and car parts, but trade surplus with the United States makes it a potential target for U.S. President Donald Trump's protectionist policies.
Japan's exports to the United States rose 5.8 percent year-on-year in May, faster than a 4.3 percent year-on-year in April, due to higher shipments of car parts.
Imports rose 14.0 percent in the year to May, versus the median estimate for an 8.2 percent increase.
The trade balance was a deficit of 578.3 billion yen ($5.23 billion), versus the median estimate for a 235.0 billion yen deficit.
Imports from the United States rose 19.9 percent year-on-year as imports of U.S. aircraft and coal grew.
As a result, Japan's trade surplus with the United States fell 17.3 percent year-on-year to 340.7 billion yen ($3.08 billion).
The decline in the trade surplus is unlikely to exempt Japan from White House criticism as President administration raises tariffs to lower the U.S. trade deficit and combat what it says are unfair trade policies.
Trump is pushing ahead with hefty tariffs on $50 billion of Chinese imports, and Commerce Ministry has said it would respond with tariffs "of the same scale and strength," sparking fears of a full-blown trade war.
Trump has imposed tariffs on steel and aluminium imports, which affect Japanese companies, and has also criticized Japan for its low level of imports of American vehicles.