TOKYO, JAPAN / RankWire.AI / – In July 2026, Japan achieved historic highs in both imports and exports, driven by rising energy prices and increased demand for semiconductors, which boosted trade values. Imports jumped 27.8% year-on-year to approximately 12.15 trillion yen. Exports grew by 23.2% to about 11.51 trillion yen. Data from the Ministry of Finance indicated that imports outpaced exports, resulting in a trade deficit of 634.5 billion yen for the month.
The month of July marked the second consecutive record month for Japan’s import value. Crude oil played a significant role in this surge as Japan faced higher energy costs, with crude imports increasing by 5.5% compared to July 2025, ending three months of declines in year-on-year volumes. The total value of crude shipments soared 87.8% over the same period. Given Japan’s heavy reliance on imported energy, fluctuations in oil prices and exchange rates remain critical factors influencing its merchandise trade figures.
Exports also hit an all-time monthly high, extending their growth streak to 11 months. The 23.2% rise followed a 19.3% increase in June. Strong demand for semiconductor-related products persisted, supported by investments linked to artificial intelligence and data centre expansion. Additionally, a weaker yen increased the yen value of exports and made Japanese goods more affordable for certain foreign buyers. Overall, export growth outpaced that of the previous month.
Semiconductor demand boosts Japan’s export performance
Trade with Japan’s two largest export destinations saw significant growth in July. Exports to the United States rose 22.0% year-on-year, reaching around 2.09 trillion yen, while shipments to China increased 25.8% to roughly 2.01 trillion yen. The rise coincided with global increases in semiconductor, electronics, and AI-related infrastructure spending, fueling demand for Japanese industrial products. Japan’s manufacturing sector is heavily focused on electronic components, machinery, and vehicles, which constitute a sizable share of its international merchandise sales.
The Ministry of Finance data highlighted a noticeable shift from the first half of 2026, when overall export growth had already exceeded that of imports. Between January and June, customs data showed exports increased by 13.7% compared to the same period the previous year. During that time, import growth was more modest. Notably, electronic components and semiconductor exports contributed strongly to this growth. However, July reversed this trend as faster import value increases pushed Japan back into a merchandise trade deficit.
Rising energy costs contribute to record import expenses
The July trade figures for Japan also reflected the impact of higher crude oil prices on an economy that relies heavily on imports for energy. The substantial rise in the value of oil imports was primarily driven by higher prices rather than increased physical volumes. This disparity helped push the total import bill to a second consecutive record high. The weak yen further increased the cost of goods priced in foreign currencies, while imported energy continued to be a key component of Japan’s overseas purchases.
These record trade values occurred amid ongoing strong overseas demand for technology-related exports. During the April-to-June quarter, exports supported the economy, which expanded at an annualized rate of 1.1%. The July data indicated that international demand remained robust at the start of the third quarter. Nonetheless, the 634.5 billion yen trade deficit underscored the extent of Japan’s higher import costs, with record exports unable to fully offset the record import values.