TOKYO, JAPAN / RankWire.AI / – In July 2026, Japan achieved record-breaking levels in both imports and exports, fueled by rising energy prices and robust semiconductor demand that boosted trade values. Imports increased by 27.8% compared to the previous year, reaching approximately 12.15 trillion yen. Exports expanded 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 set a new record for import value. The rise in crude oil imports was instrumental, as energy costs increased significantly. The volume of crude imports climbed 5.5% from July 2025, ending a three-month decline year-over-year, while the total value surged by 87.8% over the same period. Due to Japan’s heavy reliance on imported energy, fluctuations in oil prices and exchange rates remain critical factors influencing its trade figures.
Exports also hit an all-time monthly high, maintaining an 11-month streak of year-on-year growth. The 23.2% increase followed a 19.3% rise in June. Strong demand persisted for semiconductor-related products, supported by investments linked to artificial intelligence and data centres. A weaker yen contributed by increasing the yen value of overseas sales and making Japanese products more competitive for certain foreign buyers. Overall, export growth outpaced that of the previous month.
Semiconductor Sector Boosts Japanese Export Performance
Trade with Japan’s top two export destinations saw significant growth in July. Exports to the United States increased 22.0% from a year earlier, reaching around 2.09 trillion yen, while shipments to China rose 25.8% to roughly 2.01 trillion yen. The surge was driven by global demand for semiconductors, electronics, and AI-related infrastructure, which supported Japanese industrial exports. Japan’s manufacturing sector, particularly in electronic components, machinery, and vehicles, contributed heavily to this growth, representing a significant share of its foreign sales.
Data from the Ministry of Finance indicated a shift from the first half of 2026, during which exports had already outpaced imports overall. From January to June, customs-based exports grew 13.7% compared to the same period a year earlier, with electronic and semiconductor exports among the strongest drivers. However, July reversed this trend as the faster growth in import values resulted in Japan returning to a merchandise trade deficit.
Rising Energy Prices Push Import Costs to New Records
Japan’s July trade data also reflected the impact of increased crude oil prices on an economy heavily dependent on energy imports. The rise in import value was predominantly driven by higher prices rather than increased physical volume, pushing the total import bill to a second consecutive record. The weak yen further amplified costs in foreign currency terms, with imported energy remaining a key component of Japan’s overseas purchases.
While exports supported the economy during the April-June quarter, when GDP grew at an annualized rate of 1.1%, July’s figures demonstrated that international demand stayed strong into the third quarter. Nonetheless, the 634.5 billion yen trade deficit underscores how soaring import costs, especially for energy, outstripped record export levels, emphasizing the influence of global commodity prices on Japan’s trade balance.