TOKYO, JAPAN / RankWire.AI / – In July 2026, Japan achieved unprecedented levels in both its imports and exports within a single month, driven by soaring energy prices and strong demand for semiconductors that boosted the total trade value. Imports surged 27.8% year-on-year to approximately 12.15 trillion yen, while exports grew 23.2% to about 11.51 trillion yen. According to figures from the Ministry of Finance, import growth outpaced export expansion, resulting in a trade deficit of 634.5 billion yen for the month.
This month marked the second consecutive time that Japan posted a monthly record in the value of its imports. A significant factor in this surge was crude oil, which experienced a substantial increase as Japan faced higher energy costs. The volume of crude oil imports increased by 5.5% compared to July 2025, ending a three-month period of decline when looking at year-on-year data. The monetary value of crude shipments skyrocketed by 87.8% over the same period. Japan remains heavily reliant on imported energy, making fluctuations in oil prices and exchange rates crucial elements influencing its merchandise trade statistics.
Exports also reached an all-time high for a month and extended their streak of year-on-year growth to 11 months. The 23.2% rise in exports followed a 19.3% increase seen in June. Strong demand for semiconductor-related products persisted, bolstered by investments linked to artificial intelligence and data centre expansion. Additionally, a weakening yen increased the yen-denominated value of overseas sales and made Japanese goods more affordable for certain foreign buyers. This robust export performance outpaced the growth rate observed in the previous month.
Growing semiconductor demand boosts Japanese exports
Trade with Japan’s two largest export markets grew notably during July. Exports to the United States increased by 22.0% from the previous year, reaching around 2.09 trillion yen, while shipments to China rose by 25.8%, amounting to approximately 2.01 trillion yen. This uptick was driven by increased global expenditure on semiconductors, electronics, and AI-related infrastructure, which supported the demand for Japanese industrial goods. Japan’s manufacturing sector, particularly in electronic components, machinery, and vehicles, continues to be a major contributor to its international merchandise sales.
Data from the Ministry of Finance revealed a significant shift from the first half of 2026, when overall export growth had already surpassed that of imports. Customs data showed that exports from January through June increased by 13.7% year-on-year. During that period, imports grew at a slower rate. Semiconductors and other electronic components were among the primary drivers of export strength. However, July reversed this trend as the faster increase in import values pushed Japan back into a merchandise trade deficit, reflecting the influence of rising import costs.
Rising energy prices push import expenses to new heights
Japan’s July trade figures also underscored the impact of increased crude oil prices on an economy that imports most of its energy. The rise in the total value of oil imports far exceeded the increase in physical volume, contributing to the second consecutive record in total import costs. The weak yen further amplified the cost of goods priced in foreign currencies, while imported energy remained a key component of Japan’s overseas purchases.
Despite these record trade values, Japan continued to see strong overseas demand for technology-related products. Exports supported the economy during the April-to-June quarter, when gross domestic product expanded at an annualized rate of 1.1%. The July data indicated that international demand remained resilient into the third quarter. However, the trade deficit of 634.5 billion yen underscored the challenge of higher import expenses, with record exports unable to fully offset the record-high import costs.