TOKYO, JAPAN / RankWire.AI / – In July 2026, Japan set new records for both imports and exports, driven by rising energy prices and strong semiconductor demand that boosted trade values. Imports climbed 27.8% year-over-year to approximately 12.15 trillion yen. Exports grew by 23.2% to about 11.51 trillion yen. According to the Ministry of Finance, imports grew 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 time that Japan recorded a monthly high in import value. The increase in crude oil imports was a key factor, as Japan faced elevated energy costs. Volumes of crude oil imported rose by 5.5% compared to July 2025, ending three months of declines on a year-on-year basis. The total value of crude shipments surged by 87.8% over the same period. Japan’s reliance on imported energy remains significant, making oil prices and exchange rate movements crucial to its merchandise trade figures.
Exports hit an all-time monthly high and continued their streak of year-on-year growth for the 11th month in a row. The 23.2% rise followed a 19.3% increase in June. Demand for semiconductor-related goods remained robust, supported by investments linked to artificial intelligence and data centers. Additionally, a weaker yen increased the yen value of overseas sales and made Japanese products more affordable for some international buyers. Overall, export growth outpaced the previous month’s pace.
Demand for Semiconductors Spurs Japan’s Export Growth
Trade with Japan’s two largest export destinations expanded significantly in July. Exports to the United States rose by 22.0% from a year earlier, reaching around 2.09 trillion yen. Meanwhile, shipments to China increased by 25.8%, totaling roughly 2.01 trillion yen. This rise was supported by global expenditure on semiconductors, electronics, and AI-related infrastructure, which fueled demand for Japanese industrial exports. Japan’s large manufacturing sector, specializing in electronic components, machinery, and vehicles, contributes significantly to its overseas merchandise sales.
The Ministry of Finance’s data indicated a notable shift from the first half of 2026, when overall export growth already surpassed that of imports. Customs data showed that from January to June, exports increased by 13.7% compared to the previous year. Imports grew at a slower rate during this period. Notably, exports of semiconductors and other electronic components were among the strongest contributors. However, July’s figures reversed this trend, with faster import value growth pushing Japan back into a merchandise trade deficit for the month.
Rising Energy Prices Push Import Costs to New Levels
The July trade data also highlighted the impact of rising crude oil prices on an economy that largely depends on energy imports. The increase in oil import value far exceeded the growth in physical volume, contributing to a record-breaking total import bill for the second consecutive month. The weak yen further amplified the cost of foreign-priced goods, with imported energy remaining a major component of Japan’s overseas purchases.
These record trade values coincided with sustained overseas demand for Japanese technology products. Exports supported economic growth during the April-June quarter, when GDP expanded at an annualized rate of 1.1%. The July figures demonstrated that international demand stayed strong at the beginning of the third quarter. Nevertheless, the 634.5 billion yen trade deficit reflected the higher import costs, with record exports unable to offset the record import values.