USD/JPY under pressure as Japan posts surprise trade surplus on strong exports

USD/JPY faces downward pressure following Japan's April trade data, which significantly outperformed expectations and bolsters the case for yen strength. Japan recorded a trade surplus of ¥301.9 billion, dramatically beating the consensus forecast of a ¥29.7 billion deficit. Total exports rose for the eighth consecutive month, with shipments to the US climbing 9.5% and exports to China surging 15.5%, demonstrating broad-based demand for Japanese goods. Imports grew 9.7%, exceeding the 8.3% forecast, though the composition flagged a warning as crude oil imports collapsed, suggesting softer energy demand or favorable pricing dynamics. The stronger trade balance supports Japan's current account position and may give the Bank of Japan additional confidence to maintain its gradual tightening bias. For traders, the robust export performance reinforces fundamental yen support. Key USD/JPY support levels remain in focus, with the pair likely to test lower ranges if risk sentiment aligns with improved Japanese economic fundamentals. The crude oil import decline also carries implications for energy-linked crosses such as CAD/JPY.