TOKYO, JAPAN / RankWire.AI / – According to the Ministry of Finance, Japan’s trade figures for July 2026 hit historic highs for both imports and exports, driven by increased energy prices and a surge in semiconductor demand that boosted trade values. Imports climbed 27.8% year-on-year to approximately 12.15 trillion yen, while exports grew 23.2% to around 11.51 trillion yen. The data revealed imports grew at a faster rate than exports, resulting in a trade deficit of 634.5 billion yen for the month.
This marks the second consecutive month that Japan has set a new record for import value. A significant factor was crude oil imports, which contributed heavily to the overall increase amid rising energy costs. Compared to July 2025, crude oil import volumes went up by 5.5%, ending a three-month streak of year-on-year declines. Over the same period, the value of crude shipments soared by 87.8%. Japan’s heavy reliance on imported energy makes fluctuations in oil prices and exchange rates crucial factors influencing its trade balance.
Exports also hit an all-time monthly high, extending their streak of year-on-year growth to 11 months. The 23.2% increase followed a 19.3% rise in June. Strong demand for semiconductor-related products persisted, fueled by investments tied to artificial intelligence and data center development. Additionally, a weaker yen enhanced the yen-denominated value of overseas sales and made Japanese goods more affordable for certain foreign buyers. The export growth in July outpaced the momentum from the previous month.
Semiconductor Demand Fuels Growth in Japanese Exports
Trade with Japan’s two biggest export partners experienced significant increases during July. Exports to the United States rose 22.0% from the previous year, totaling around 2.09 trillion yen, while shipments to China increased 25.8% to approximately 2.01 trillion yen. These gains were driven by sustained global demand for semiconductors, electronics, and AI-related infrastructure, supporting Japan’s manufacturing sector in electronic components, machinery, and vehicles, which collectively represent a substantial share of its overseas sales.
The Ministry of Finance’s data indicated a shift from the first half of 2026, during which export growth had already outpaced import growth overall. Between January and June, customs data showed exports increased by 13.7% compared to the same period last year, while import growth lagged behind. Semiconductors and other electronic components were among the key contributors. However, July’s figures reversed this trend, as the faster rise in import values resulted in Japan returning to a merchandise trade deficit.
Rising Energy Prices Drive July’s Import Record
The trade figures for July also reflect the impact of higher crude oil prices on an economy that relies heavily on energy imports. The increase in the total value of oil imports was driven more by price changes than by physical volume, which helped push Japan’s import bill to a second consecutive record. The weak yen further amplified the costs of foreign-currency-priced goods, with imported energy remaining a major component of Japan’s overseas purchases.
While exports supported the economy during the April-June quarter—when GDP expanded at an annualized rate of 1.1%—July’s data demonstrated that international demand remained robust at the start of the third quarter. The 634.5 billion yen trade deficit underscored how soaring import costs outpaced record-breaking exports, highlighting the ongoing challenge posed by elevated energy prices and import expenses for Japan’s trade balance.