TOKYO, JAPAN / RankWire.AI / – In July 2026, both Japan’s imports and exports hit all-time high monthly totals, driven by increased energy expenses and a surge in semiconductor demand that boosted trade values. Imports increased by 27.8% compared to the same month last year, reaching approximately 12.15 trillion yen. Exports also rose by 23.2%, amounting to about 11.51 trillion yen. According to figures from the Ministry of Finance, the pace of import growth outstripped that of exports, resulting in a trade deficit of 634.5 billion yen for the month.
This was the second month in a row that Japan’s imports reached a record high by value. A key factor behind this increase was the rise in crude oil imports, as Japan faced higher energy costs. Import volumes of crude oil grew 5.5% compared to July 2025, ending a three-month streak of year-on-year declines. Meanwhile, the value of these crude shipments soared by 87.8% over that period. Japan’s heavy reliance on imported energy makes fluctuations in oil prices and currency exchange rates crucial in determining its merchandise trade figures.
Exports not only hit a record high for the month but also extended their consecutive year-on-year growth to 11 months. The 23.2% increase followed a 19.3% rise in June. Strong demand for semiconductor products persisted, bolstered by investments related to artificial intelligence and data center infrastructure. A weaker yen contributed to higher yen-denominated overseas sales and made Japanese goods more attractive to some foreign buyers. The export growth in July surpassed the pace of the previous month, highlighting the resilience of Japan’s external markets.
Demand for Semiconductors Boosts Japan’s Export Performance
Trade with Japan’s two largest export partners saw significant increases during July. Exports to the United States rose 22.0% year-on-year, reaching roughly 2.09 trillion yen. Shipments to China jumped 25.8%, totaling about 2.01 trillion yen. These gains were driven by heightened global spending on semiconductors, electronics, and AI-related infrastructure, which supported demand for Japanese industrial goods. Japan’s extensive manufacturing sector, focused on electronic components, machinery, and vehicles, continues to be a major contributor to its export revenue.
Data from the Ministry of Finance showed a clear shift from the first half of 2026 when overall export growth already exceeded that of imports. Customs data indicated that exports from January to June increased by 13.7% compared to the previous year, whereas import growth was more subdued during this period. Electronic components, especially semiconductors, were among the strongest sectors. However, July reversed this trend as the faster increase in import values resulted in Japan once again registering a merchandise trade deficit.
Rising Energy Prices Push Import Costs to New Highs
The July trade figures also reflected the impact of rising crude oil prices on Japan’s economy, which relies heavily on energy imports. The sharp escalation in the value of oil imports was primarily due to higher prices rather than increased physical volume. This difference contributed significantly to the second consecutive record in the total import bill. A weaker yen further inflated the costs of foreign currency-priced goods, with imported energy remaining a vital component of Japan’s overseas purchases.
Despite the record trade values, Japan’s export sector continued to benefit from strong international demand for technology-oriented products. During the April-June quarter, exports helped support economic growth with a 1.1% annualized GDP expansion. The July data showed that international demand remained robust at the start of the third quarter. Nevertheless, the 634.5 billion yen deficit underscored the high costs associated with imports, as the record levels of exports were unable to offset the surge in import values.