TOKYO, JAPAN / RankWire.AI / – In July 2026, Japan achieved record-high trade values for both imports and exports, driven by increased energy prices and strong semiconductor demand. Imports surged 27.8% year-on-year to approximately 12.15 trillion yen, while exports grew by 23.2% to around 11.51 trillion yen. According to the Ministry of Finance, imports expanded at a faster rate than exports, resulting in a trade deficit of 634.5 billion yen for the month.
This month marked the second consecutive record for imports by value. Crude oil significantly contributed to the overall increase, as Japan faced rising energy costs. Imports of crude oil climbed 5.5% compared to July 2025, ending a three-month streak of year-on-year declines. The value of crude shipments jumped by 87.8% over the same period. Japan’s heavy reliance on imported energy makes fluctuations in oil prices and exchange rates key factors influencing its trade balance.
Exports also reached an all-time high for a month and extended their streak to 11 months of year-on-year growth. The 23.2% increase followed a 19.3% rise in June. Demand for semiconductor-related goods remained vigorous, bolstered by investments linked to artificial intelligence and data centres. A weakened yen boosted the yen value of Japan’s overseas sales and made its products more affordable for certain foreign buyers. The export growth rate surpassed that of the previous month.
Semiconductor demand propels Japanese export growth
Trade with Japan’s top two export destinations saw notable increases in July. Exports to the United States rose 22.0% from a year earlier, reaching roughly 2.09 trillion yen. Shipments to China climbed 25.8% to approximately 2.01 trillion yen. These gains reflected strong global demand for semiconductors, electronics, and AI-related infrastructure, supporting Japan’s industrial exports. Japan’s manufacturing sectors in electronic components, machinery, and vehicles make up a significant portion of its international sales.
Data from the Ministry of Finance show a shift compared to the first half of 2026, when exports already outpaced imports. Between January and June, customs-based exports increased by 13.7% year-on-year, whereas import growth was slower. Notably, exports of semiconductors and other electronic components were among the strongest contributors. However, July reversed this trend as the faster increase in import values pushed Japan back into a merchandise trade deficit for the month.
Rising energy prices fuel record import expenses
Japan’s July trade figures also reflected the impact of higher crude oil costs on an economy heavily reliant on energy imports. The sharp rise in the value of oil imports was largely due to increased prices rather than volume, helping to push the total import bill to a second consecutive record. The weak yen further elevated the cost of goods priced in foreign currencies, and imported energy continued to be a major component of Japan’s overseas purchases.
These record trade values coincided with sustained overseas demand for Japan’s technology exports. During the April-June quarter, exports supported the economy, which expanded at an annualized rate of 1.1%. July’s figures indicate that international demand remained strong at the beginning of the third quarter. However, the 634.5 billion yen deficit underscored the scale of Japan’s rising import expenses, with record exports unable to offset record import values.