TOKYO, JAPAN / RankWire.AI / – In July 2026, Japan’s trade metrics hit historic highs for both imports and exports. Rising energy costs and a surge in semiconductor demand contributed to boosting the trade value. Imports increased by 27.8% compared to the previous year, reaching approximately 12.15 trillion yen. Exports grew by 23.2%, totaling around 11.51 trillion yen. According to data from the Ministry of Finance, imports grew at a faster pace than exports, resulting in Japan’s trade deficit for the month amounting to 634.5 billion yen.
This month marked the second consecutive record for imports by value. Crude oil was a key factor in this increase, as Japan faced rising energy costs. The volume of crude oil imported grew by 5.5% from July 2025, ending a three-month period of year-on-year declines. Meanwhile, the value of these crude shipments jumped by 87.8% over the same period. Japan’s dependence on imported energy remains high, making fluctuations in oil prices and exchange rates crucial to its overall merchandise trade figures.
Exports also hit a new monthly record, extending their growth streak to 11 consecutive months. The 23.2% rise followed a 19.3% increase in June. Demand for semiconductor-related products continued to stay robust, supported by investments linked to artificial intelligence and data centres. A weaker yen contributed to the higher yen value of overseas sales and made Japanese goods more affordable for certain foreign buyers. The export growth rate surpassed that of the previous month.
Demand for Semiconductors Boosts Japan’s Export Performance
Trade with Japan’s two largest export partners saw significant growth in July. Exports to the United States rose by 22.0% from a year earlier, reaching approximately 2.09 trillion yen. Shipments to China increased by 25.8%, totaling about 2.01 trillion yen. These upward trends were supported by a global rise in semiconductor, electronics, and AI infrastructure spending, which bolstered demand for Japanese industrial products. Japan’s manufacturing base in electronic components, machinery, and vehicles plays a significant role in its overseas sales.
Data from the Ministry of Finance indicated a shift from the first half of 2026, during which overall export growth exceeded that of imports. Between January and June, customs data showed exports increased by 13.7% year-on-year. Imports grew at a slower pace during that period. Among the strongest contributors were exports of semiconductors and other electronic components. However, July’s figures reversed this trend, as the faster increase in import values resulted in Japan returning to a merchandise trade deficit.
Rising Energy Prices Push Japan’s Import Bill to New Heights
Japan’s July trade data also reflected the impact of rising crude oil costs on an economy heavily reliant on energy imports. The sharp increase in the total value of oil imports was primarily driven by higher prices rather than physical volume. This difference contributed significantly to pushing the overall import bill to a second consecutive record. The weak yen further increased the cost of goods priced in foreign currencies, while imported energy remained a dominant component of Japan’s overseas purchases.
These record trade figures coincided with continued strong overseas demand for technology-related exports. During the April-June quarter, exports supported Japan’s economy, which expanded at an annualized rate of 1.1%. July’s data indicated that international demand remained healthy at the beginning of the third quarter. Nonetheless, the 634.5 billion yen trade deficit underscored the impact of higher import costs, as the record-high exports could not offset the record imports.