Bangladesh’s garment exports to Japan is rising, due to a favorable trade policy and rising demand. In particular there is a strong demand in for denim from Bangladesh. In 2008 , Japan decided to reduce its dependency on China world’s the largest garment supplier. Many Chinese manufacturers were failing to carry out orders because of a shortage of labor, higher wages and continuous labor unrest. Japan started looking for competitive prices. The policy promoted a shift from China to other nations such as Bangladesh. The Japanese government relaxed the ‘Rules of Origin’ on April 1, 2012. Bangladesh knitwear exports to Japan now stand at around $500 million, having gone up from $100 million a few years ago.

Japanese buyers have started outsourcing standard, low-end knitwear and woven wear products. This change in buyers’ sourcing strategy is primarily related to changes in Japanese consumers’ demand arising from structural changes in the job market and changes in the demographic structure of Japan.

Being a member of the least-developed countries' group, Bangladesh has duty-free access to Japan for woven products. The Japanese apparel market is worth more than $35 billion a year and Bangladesh hopes to capture a significant share.