TOKYO, JAPAN / RankWire.AI / – In July 2026, Japan’s trade figures hit new heights for both imports and exports, driven by increased energy prices and strong semiconductor demand, which boosted trade values. Imports surged 27.8% from the same month last year to approximately 12.15 trillion yen. Exports also rose by 23.2% to around 11.51 trillion yen. According to the Ministry of Finance, imports grew at a faster pace than exports, resulting in a trade deficit of 634.5 billion yen for July.
This month marked the second consecutive record-high for import value. The increase in crude oil crude oil played a key role in this trend, as Japan faced higher energy expenses. Crude oil imports grew by 5.5% compared to July 2025, ending three months of year-on-year declines. Simultaneously, the value of these shipments soared by 87.8% over the same period. Given Japan’s heavy reliance on imported energy, fluctuations in oil prices and exchange rates significantly influence its merchandise trade figures.
Exports also reached an all-time monthly record and extended their streak of year-on-year growth to 11 months. The 23.2% rise followed a 19.3% increase in June. Demand for semiconductor products remained notably strong, fueled by investments related to artificial intelligence and data centers. A weakening yen contributed to the higher yen value of overseas sales and made Japanese goods more affordable for certain foreign buyers. The export growth surpassed the rate seen during the previous month.
Semiconductor Demand Bolsters Japan’s Export Performance
Trade with Japan’s two largest export destinations grew significantly in July. Exports to the United States increased 22.0% year-on-year to approximately 2.09 trillion yen, while shipments to China climbed 25.8% to around 2.01 trillion yen. These increases were supported by global demand for semiconductors, electronics, and AI-related infrastructure, which in turn supported Japanese industrial exports. Japan’s manufacturing sectors of electronic components, machinery, and vehicles account for a large share of its overseas merchandise sales.
The Ministry of Finance’s data indicated a shift from the first half of 2026, during which overall export growth already outpaced that of imports. Customs data showed a 13.7% increase in exports from January through June compared to the previous year, with imports rising more slowly over the same period. Exports of semiconductors and other electronic components were among the strongest performers. However, July’s figures marked a reversal, as the faster increase in import values pushed Japan back into a merchandise trade deficit for the month.
Rising Energy Prices Contribute to Record Import Expenses
The July trade data reflects the impact of climbing crude oil prices on an economy that relies heavily on imports for its energy needs. The sharp rise in the value of oil imports was primarily due to higher prices, even though physical volumes increased less significantly. This disparity helped push Japan’s total import bill to a second consecutive record. The weakening yen further elevated the cost of foreign-priced goods, with imported energy remaining a crucial part of Japan’s overseas purchases.
These record trade values occurred amid ongoing strong global demand for Japanese technology exports. During the April-to-June quarter, exports supported Japan’s economy, which expanded at an annualized rate of 1.1%. The July figures indicate that international demand remained robust at the start of the third quarter. Nevertheless, the 634.5 billion yen trade deficit underscores the substantial impact of rising import costs, as record exports could not fully offset record import values.