In a surprising turn of events, Japan’s exports for October surpassed expectations, as revealed by government data released on Friday. This uptick was driven by strong demand in Europe and Asia, which provided a much-needed boost to the nation’s economy.

According to the data, exports increased by 3.6% compared to the same period last year. This figure far exceeded the 1.1% growth anticipated by economists polled by Reuters, although it did fall short of the 4.2% increase recorded in September.

Breaking down the numbers further, shipments to Asia saw a 4.2% rise, while exports to Western Europe surged by 8.8% over the previous year. These gains helped counterbalance a 2.7% dip in exports to North America, where shipments to the U.S. specifically dropped by 3.1%.

A closer look at the automotive sector, Japan’s most valuable export category to the U.S., reveals a 7.5% decrease from the previous year. However, this decline is markedly less severe than the 24.2% plummet reported in the prior month, indicating a potential stabilization in the market.

Norihiro Yamaguchi, lead economist at Oxford Economics, said that October data “paints a mixed picture of current export momentum.”

Yamaguchi noted that while capital goods exports remained sluggish due to subdued machinery investment momentum globally, the worst time for auto exports seems to be behind, and semiconductor exports have improved.

Overall, Japan’s auto exports rose 0.4% in October, while semiconductor shipments climbed 15.8% year on year.

“While we continue to believe that the lagged impact of higher global tariffs will drag on exports in the near term, recent upgrades to our global outlook point to a more modest adjustment than we had previously expected,” Yamaguchi said.

The data comes at a time when Japan is locked in a diplomatic spat with its largest trading partner, China, over Prime Minister Sanae Takaichi’s comments related to Taiwan.

The impact on trade from this spat could show up in next month’s data.

The Asia Group said in a note on Wednesday that mainland China had suspended imports of seafood from Japan. It also pointed to Chinese social media showing some Japanese brand stores in Shanghai and Beijing “voluntarily” closing for several days citing “reasons that everyone know.”

Meanwhile, imports to the world’s fourth largest economy unexpectedly rose 0.7%, defying expectations of a 0.7% fall from the Reuters poll.

Stronger-than-expected exports data would come as a welcome relief for Japan’s economy that struggled in the third quarter. The country’s GDP contracted 0.4% quarter on quarter, with net exports dragging the quarterly figure down by 0.2 percentage point.

Japan also released its consumer inflation data on Friday, with headline inflation now running above the Bank of Japan’s 2% target for 43 months in a row.

The Nikkei 225 was 2.38% down after the data release, while the Japanese yen rose marginally to trade at 157.39 against the dollar.

Japan’s Finance Minister Satsuki Katayama signaled the possibility of intervening in the market, saying that she was “alarmed by recent one-sided, sharp moves in the currency market,” Reuters reported.

According to LSEG data, the dollar has appreciated 2.19% against the yen over the course of November so far, while over the last six months, it has gained 9.52%.

Mitul Kotecha, head of FX & EM macro strategy for Asia at Barclays, however, told CNBC’s “Squawk Box Asia” that intervention does not seem to be imminent.

“The problem that the Japanese officials face is that we’re still in a broadly positive dollar environment. And as we know, intervention does not work as well when you have the broader market move going against you. It works much better when the move is going with you,” Kotecha said.

He did not entirely disregard chances of an intervention though: “There’s going to be focus on volatility that’s going to be important. We hear that from Japanese officials. So may not just be levels, it could also be the pace of the move that could trigger intervention.”