Market overview

As New Zealand’s fourth largest trading partner, Japan remains a key export partner, with 50% of New Zealand exports in the food and beverage category.

According to the recent Japan Market Report by MFAT, New Zealand exports to Japan in July were 8.3% lower than the same time last year but fared better than the overall 22% drop in Japan’s imports from all countries. Looking back at the first half of 2020 (Jan-June) New Zealand goods exports to Japan increased by 10.3% to $2,063 million, the highest total export value for this period since the previous record in 2001.

Key reasons for the relative success of New Zealand exports into Japan have been the fact that the majority of our exports are essential products such as food - our food exports are seen as Healthy and our exporters have been nimble in adapting to changing sales channels.The reduction in tariffs agreed under CPTPP has also added an extra boost in some sectors.

Despite border restrictions and the global economic slow-down, three Japanese companies have announced major new investments in New Zealand over the past few months, according to a report from the Ministry of Foreign Affairs and Trade

A recent spike in COVID-19 cases indicates the emergence of a second wave of infections, which would likely setback Japan’s economic recovery efforts.

Tourism and education service exports continue to be severely hit by COVID-19, and look set to remain this way in the short to medium-term due to border restrictions.

The announcement by Rio Tinto that it will wind up its operations at the Tiwai Point aluminium smelter in August 2021 will have a significant impact in the medium term, with aluminium making up approximately 16% of New Zealand’s goods exports to Japan.

At this stage, there are no major changes to supply chain and logistics within Japan. 

Japanese corporates have been focused on maintaining business as-is and securing stability for the current products and relationships they have. This is a difficult time to introduce new products and concepts in Japan, given the importance placed on developing relationships in person and over a long period of time.

For more information on doing business in Japan, visit myNZTE - our free online portal for curated, in-depth information and guidance.

COVID-19 Market Realities: Japan

Export support
Thought leadership
3 mins
Last updated: 22 Jul 2020
Staying ahead during Japan’s recovery

NZTE Trade Commissioner for Japan, Craig Pettigrew, shares 3 crucial steps to help exporters navigate COVID-19 & emerge stronger with local partners.

Read more
Export support
Last updated: 8 Jun 2020
COVID-19 Market Realities: Japan Food and Beverage, 29 May

NZTE Trade Commissioner, Craig Pettigrew, speaks with Zespri's Ichiro Anzai, Freshco's Greg Cross & Cookie Time's Jason Allen about business in Japan.

Watch now
Export support
Last updated: 27 Apr 2020
COVID-19 Market Realities: Japan overview, 28 April

Craig Pettigrew (NZTE Trade Commissioner, East Asia) spoke to Beachhead Advisor Sam Cassels and NZTE Business Development Manager Shintaro Nakamura.

Watch now

Economy and trade

With Prime Minister Shinzo Abe’s early departure from his position due to ill health, there are many challenges for his successor to tackle, and questions around whether they should continue on the path of “Abenomics”, particularly in the middle of the pandemic.

Japan has struggled with deflation for decades. Its core consumer price index (excluding food and fuel) has fallen for 13 of the last 20 years, and experts predict another round of deflation that may last two years or more.

Following the lifting of the national state of emergency on 25 May, the downward trend in the Japanese economy has started to reverse due to the resumption of socio-economic activities and the Japanese government's economic stimulus initiatives. The economy nonetheless remains in recession and is forecast to shrink by around 6% in 2020.

The economy is heading for its weakest period since the 2009 financial crisis, according to latest economist projections. Goldman Sachs Group Inc has cut its 2020 expectations for gross domestic product to a 3.1% contraction from a 2.1% drop. Barclays' latest projection is for the economy to shrink 2.6%.

In July 2020 the Bank of Japan downgraded its assessments on all nine regional economies in the country for the second straight quarter; the first time since January 2009. Due to the domestic state of emergency from April to May, corporate profits and business sentiment has deteriorated and the employment and income situation have been weak.

The Japan Research Institute predicts the Japanese economy will likely return to positive growth of approximately 10% on an annualised basis in the July-September period following a record contraction in GDP of 28% on an annualised basis in the April-June quarter.

The unemployment rate rose to 2.9% in May from 2.6% in April, although on this measure Japan continues to fare better than other economies. The contraction has been most pronounced in the automotive, machinery, retail, hospitality and tourism sectors.

According to the Asia Pacific Executive Brief (PDF), two factors may cushion the downturn for Japan’s economy. One is the relatively less pronounced unemployment rate above, while the other is the record cash stockpile held in reserve by Japanese companies - equalling 130% of Japanese GDP in the last quarter of 2019, triple the ratio of cash reserves to GDP for US-listed firms.

The global impact of COVID-19 has seen a substantial decline in Japan's exports. Provisional data for Japan's goods exports in the first 20 days of June show a 25% drop as compared with June 2019. This dip in exports has largely been caused by the decrease in demand for automobiles in the US and the EU.

Exports to Asia (and particularly China) have been comparatively stable, driven by demand for ICT-related goods (related to 5G, data centres and semiconductors).

The Japanese Government had been aiming to attract 40 million tourists in 2020, largely for the Summer Olympic Games. However, Japan received only an estimated 2,600 foreign visitors in June, and numbers are not expected to recover quickly.

In the second half of 2020 it is currently predicted that the Japanese economy will rebound, boosted by the resumption of socio-economic activities following the end of the state of emergency and the Japanese Government's stimulus initiatives. There are signs that this is already occurring, with private consumption (which makes up over half of Japan's GDP and which took a big hit in April and May, showing signs of picking up.

Another positive feature of the Japanese economy is recent record levels of profit and strong balance sheets for large corporations, which should allow them to ride out the crisis more robustly than those in a lot of other markets.

Supply chain, logistics & freight

The main disruption to the supply chain is generally related to constrained air cargo operations, with ports and internal logistics continuing to mostly operate effectively.

Direct flights between Japan and New Zealand were suspended at the end of March, but direct cargo only flights have resumed. Visit our Air Freight Options page for more information on these flights. Sea freight operations continue to service Japan regularly with little disruption.

Government support

The Japanese Government is providing a range of packages and support for COVID-19 related impacts on business. New Zealand businesses in Japan are eligible if they have registered entities in Japan. All applications need to be filled in in Japanese, and English speaking local agents are available to help. The main scheme involves Finance Guarantees and Business Packages including grants.

Finance Guarantees

The Japanese Government launched a Business Finance Guarantee Scheme for small and medium-sized businesses (SMEs). It guarantees up to 100% of the risk for a maximum 20-year bank loan, available for 5% decline in revenue or more, dependent on conditions. The definition of what qualifies as an SME differs depending on which industry is involved. Prefectural governments also offer multiple finance guarantee schemes; for example the Tokyo Metropolitan Government offers a low rate bank loan. This is a lower rate loan (1.5 ~ 2.4% pa. ) for a maximum of 10 years, up to JPY 280 million, available for 5% decline in revenue or more. Strict conditions apply. Please discuss with local agents for further details.

Business Finance Support Packages

Wage Subsidy

The Japanese Government relaxed the conditions to qualify for this subsidy and raised the rate of Employment Adjustment Subsidy, as well as offering an Immediate Employment Security Subsidy for SMEs.

The prerequisite to quality for the wage subsidy has relaxed from 10% to 5% decline in revenue and the rate has increased from two-thirds to four-fifths of individual salaries of SME employees. This subsidy is paid to SME employers.

Government Grants

The Japanese Government announced a multi-billion-dollar support package offering up to JPY 2 million per SME whose revenue has declined 50% when compared with the same month the previous year due to the impact of COVID-19.

Please see this information sheet or discuss with local agents for further details.

Prime Minister Shinzo Abe's cabinet has agreed to a second exceptional budget of 31.91 trillion yen (US$296 billion), including subsidies for small businesses and cash handouts for medical workers. The funding will also be used to help finance rescue programmes and loans for struggling businesses worth 117 trillion yen. Japan's total measures amount to 230 trillion yen when loan schemes are taken into account.


International travel is severely limited to Japan. New Zealand nationals will be denied permission to enter Japan unless there are exceptional circumstances.

The most up to date information on travel restrictions are listed on the Japan Tourism website.

Direct flights between Japan and New Zealand were suspended at the end of March, but both direct passenger and cargo flights resumed in June.

Japan travel advisory: Safetravel.govt.nz

Tradeshow and event information

Numerous international tradeshows and events are being postponed or cancelled in response to the COVID-19 pandemic.

Make sure you proactively check with organisers for any tradeshow or event you're scheduled to attend – conditions and regulations are changing rapidly overseas, and events may be postponed or cancelled at short notice.

If you have questions about an event not listed here, please contact the organisers in the first instance or get in touch with NZTE for further advice.

Sector insights

As is to be expected, numerous sectors have been impacted by the COVID-19 pandemic.

About half of New Zealand’s exports to Japan are in the food and beverage sector. The impacts on those exports reflect their relative exposure to the food service/restaurant sector verses the retail sector.

The following exports at the sector level increased in May:

  • metal and metal products (by 13.2% to $49.4 million)

  • miscellaneous food and beverage products (by 84% to $26.8 million) .

The following sectors saw a decrease:

  • Horticulture (fruit, vegetables, and wine) (-3.4% to 167.4 million)

  • Dairy products (-2.7% to $84.7 million)

  • Meat and meat products (-9.7% to $36.1 million)

  • Forestry and wood products (-13.8% to $28.8 million)

  • Fish and seafood products (-21.5% to $6.3 million).

Although several sectors saw an overall decline, there were some stand-outs at the product level:

  • Gold kiwifruit increased by 5% to $110 million

  • Aluminium, not alloyed, increased by 11% to $36.6 million, and aluminium alloys increased by 21% to $9.1 million

  • Cheese including cheddar and colby increased by 24% to $34.2 million

  • Boneless frozen beef increased by 6.6% to $13.2 million

  • Food preparations increased by 74.7% to $12 million

  • Honey increased by 319% to $9.3 million.


Despite being a tech savvy nation, Japanese consumers have always preferred to do their shopping in person. However, the State of Emergency forced consumers to take their shopping online, and figures from Yamato Transport, which handles almost half of all package deliveries in Japan, showed that their business increased by 13% in April.

Online fresh food retailers like Oisix, which has over two million members and an online range of over 4,500 SKUs including meal kits, became so popular it had to stop taking on new members to keep up with demand.

On the foodservice side, while demand in the hotel, restaurant and catering channels has dropped, Japanese companies are exploring alternatives and working with online platforms to enable home delivery options. With many of New Zealand’s F&B products catering to foodservice, this means that working with your partners in-market to help them pivot will be an important part of looking after relationships and staying relevant.

The new wave of enthusiasm for e-commerce and home delivery options is there for New Zealand exporters to harness; yet this opportunity is still relatively untapped by our businesses. Only 15% of New Zealand F&B companies in Japan have a presence in e-commerce channels.

Additional resources

Below you can find information and contact details for other New Zealand government and international agencies regarding their response to COVID-19.

New Zealand Government agencies

COVID-19 helpline for businesses
New Zealand Customs
Ministry for Primary Industries (MPI)
New Zealand Export Credit (NZEC)
MFAT Export Helpline
MFAT Safetravel
Callaghan Innovation
Ministry of Health
WorkSafe New Zealand

Global agencies

World Health Organization (WHO)
Centers for Disease Control and Prevention (CDC)

Contact NZTE

We're available to talk to you about any issues your export business is facing due to COVID-19.

For existing NZTE customers, please contact your New Zealand-based Customer Manager.

If you're unsure who to contact or haven't worked with us before, you can call NZTE on 0800 555 888 or email below and one of our Customer Advisors will help you.