Japan’s trade deficit declines in the first half as exports recover.

Japan posted a trade surplus in June, the first in three months, highlighting a recovery in exports, according to government data released Thursday.

In the first half of this year, Japan’s trade deficit decreased by more than half compared to the same period last year, falling to 3.23 trillion yen, according to Finance Ministry data.

The yen’s weakness against the U.S. dollar has helped boost Japan’s exports in recent months. The trade surplus in June increased five-fold from a year earlier to 224 billion yen (approximately $1.4 billion), driven by rising exports of vehicles and computer chips.

While the weak yen benefits exports, it negatively impacts Japan’s imports, especially amid inflationary trends and rising energy costs, as Japan imports nearly all its energy.

Japan has recorded trade deficits for six consecutive fiscal half-years since the latter half of 2021, mainly due to the weak yen and rising global prices. Japan’s fiscal year runs from April to March.

In June, imports rose 3% to 8.98 trillion yen, while exports increased 5% to 9.2 trillion yen.

For the first six months of the year, imports grew 0.8% to 54.7 trillion yen, while exports climbed nearly 9% to 51.5 trillion yen.

Economists at SMBC Nikko Securities, including Koya Miyamae, project that Japan’s trade deficit will continue to decline. They noted that exports to the U.S. and Asia have risen, while those to Europe are lagging.

The U.S. dollar has been steadily rising this year, reaching 160-yen levels in recent weeks. On Thursday, the dollar was trading at about 156 yen. Although a weak yen erodes Japan’s purchasing power, it boosts the value of overseas earnings when converted into yen.