For the full year, Japan logged a 2.65 trillion yen ($A25 billion) trade deficit, the Finance Ministry reported in its preliminary data on Thursday.
That was nearly 53 per cent smaller than the deficit Japan marked the previous year.
Exports for the year rose 3.1 per cent, while imports remained about the same on-year, gaining less than one per cent.
For the month of December, Japan recorded a 105.7 billion yen ($A989 million) trade surplus.
The monthly surplus was 12 per cent smaller than what was racked up a year ago. Imports grew 5.3 per cent from the same month a year ago, while exports grew 5.1 per cent.
By nation, exports in December declined 11 per cent to the US, while growing to Britain, Africa and to some Asian points like Hong Kong and India. Imports remained strong from Europe but declined from Brazil and the Middle East.
The United States has imposed a 15 per cent tariff on most imports from Japan, a reduction from the 25 per cent that Trump initially proposed but an increase from before.
Another looming concern is the impact on Japanese manufacturing, including automakers, from China's curbs on exports of rare earths.
The controls were announced by Beijing after Prime Minister Sanae Takaichi suggested a Chinese move on Taiwan could prompt a Japanese military response.
Takaichi may call elections for next month in hopes her party can gain strength in parliament while she is popular with the public.
Overall, Japan's economy has held up, despite grumbling from the public about rising prices and stagnant wages. The benchmark Nikkei on the Tokyo Stock Exchange keeps hitting new records.
