Tokyo: Japan's trade balance shrank less than expected in August, aided chiefly by better-than-expected exports as the finalization of a Tokyo-Washington trade deal offered exporters some clarity. According to Emirates News Agency, Japan's trade balance showed a deficit of 242.5 billion yen ($1.66 billion), smaller than expectations for a deficit of 513.6 billion yen, government data revealed on Wednesday. The data highlights that exports shrank less than expected, recording a 0.1% decline against forecasts for a drop of 1.9%, and also improving from a 2.6% drop in the prior month. The reduction in the trade deficit was largely credited to the new trade agreement between Tokyo and Washington, which provided Japanese exporters with much-needed certainty amid global trade tensions. This development marks a positive turn for Japan's economy, which has faced challenges due to fluctuating global trade dynamics.