Japan exports beat forecasts with 4.2% growth in February, but China and U.S. demand slumps

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Japan’s exports climbed 4.2%% from a year ago in February, marking a sharp slowdown after hitting an over-three-year high in January.

However, the increase was higher than the 1.6% rise expected by economists polled by Reuters, and against the 16.8% jump in the previous month.

Exports to China, Japan’s largest trading partner, fell 10.9%, while shipments to the U.S dropped 8%.

Tokyo’s exports to Washington may weaken further after the U.S. announced Section 301 investigations that could lead to the reimposition of tariffs. This comes after Trump’s “reciprocal” tariffs were struck down by the Supreme Court in February.