Japan’s exports fell 0.5% in June from a year earlier, missing economists’ expectations for a 0.5% rise and marking a second straight monthly decline, Ministry of Finance data showed Thursday. Imports edged up 0.2%, returning the trade balance to a surplus of ¥153.1 billion—the first surplus in three months—despite continued weakness in overseas demand. Shipments to the United States plunged 11.4% as automobiles, Japan’s largest U.S. export, dropped 26.7% in value, even as volumes rose 3.4%, suggesting automakers are cutting prices to offset duties. Exports to China slid 4.7%, while those to the European Union grew 3.6%, underscoring divergent regional demand. The data arrive amid stalled trade talks with Washington. A temporary pause on new U.S. levies expired on 9 July, and the Biden administration plans to impose a 25% tariff on all Japanese imports from 1 August unless an agreement is reached. Economists warn the escalating tariff campaign could tip the already fragile economy into a technical recession and keep the Bank of Japan cautious about tightening policy.