Japan recorded a better-than-expected trade performance during May 2018, suggesting the country's economy remains in a strong position despite ongoing trade tensions in the region.

Exports rose by 8.1 per cent in May from the same period a year ago, exceeding the median estimate of a 7.5 per cent annual increase provided by economists polled by Reuters. This was also higher than the 7.8 per cent figure from April 2018.

The May rise in exports was the fastest in four months, and was driven by increased shipments of cars, car parts and semiconductor equipment, offering an indication that global demand is gaining strength.

Meanwhile, imports were shown to have risen by 14 per cent in the year to May, higher than the median estimate of an 8.2 per cent rise. This was attributed to the higher price of oil, among other factors.

Despite this encouraging performance, concerns persist that the recent protectionist policies of the US government - in particular its new tariffs on steel and aluminum - may impact Japan in the coming months.

Shuji Tonouchi, senior market economist at Mitsubishi UFJ Morgan Stanley Securities, said: "Exports will continue to recover, but I am a little worried about the pace of growth. Friction between the US and China on trade policy could impact Japan. This is a risk factor for Japan and for global trade."