TOKYO, JAPAN / RankWire.AI / – In July 2026, Japan’s trade activity reached historic highs for both imports and exports, driven by rising energy expenses and increased demand for semiconductors, which boosted the overall trade value. Imports surged by 27.8% from the same month a year earlier to approximately 12.15 trillion yen. Exports also experienced a 23.2% rise, totaling around 11.51 trillion yen. Data from the Ministry of Finance indicated that imports expanded 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 record for import value. A significant factor in this increase was crude oil, which contributed heavily as Japan confronted higher energy costs. Import volumes of crude oil rose by 5.5% compared to July 2025, ending a streak of three months of year-on-year declines. The monetary value of these crude shipments escalated by 87.8% during the same period. Given Japan’s heavy reliance on imported energy, fluctuations in oil prices and exchange rates continue to be influential factors affecting its trade figures for merchandise.
Meanwhile, exports also hit an all-time monthly high and extended their streak of year-on-year growth to 11 months. The 23.2% increase in exports followed a 19.3% rise in June. Demand for semiconductor-related products remained robust, supported by investments linked to artificial intelligence and data centers. Additionally, a weaker yen amplified the yen value of foreign sales and made Japanese goods more competitive for certain international buyers. The export growth outpaced that of the previous month, underscoring sustained global demand for Japanese products.
Semiconductor Industry Propels Japanese Export Surge
Trade with Japan’s top two export markets saw significant increases during July, with exports to the United States climbing 22.0% year-on-year to approximately 2.09 trillion yen. Similarly, shipments to China grew by 25.8%, reaching about 2.01 trillion yen. These growth figures coincided with a rise in global expenditure on semiconductors, electronics, and AI-related infrastructure, which bolstered demand for Japanese industrial goods. Japan’s extensive manufacturing sector specializing in electronic components, machinery, and vehicles plays a crucial role, as these categories constitute a major part of its overseas merchandise exports.
According to Ministry of Finance data, there was a notable shift from the first half of 2026, when export growth already outstripped import growth overall. Customs statistics indicated that exports from January through June increased by 13.7% compared to the previous year, while import growth was more subdued during this period. Notably, semiconductor and other electronic component exports emerged as some of the strongest contributors. However, in July, this positive trend was reversed as faster increases in import values pushed Japan back into a merchandise trade deficit.
Rising Energy Prices Drive Record Import Expenses
Japan’s trade figures for July also highlight the impact of soaring crude oil prices on an economy that relies heavily on imports for energy. The sharp increase in the total value of oil imports was primarily due to the higher prices, which far exceeded the growth in physical import volumes. This discrepancy contributed significantly to the second consecutive record high in Japan’s total import bill. The weak yen added to the costs, as goods priced in foreign currencies became more expensive, with imported energy remaining a substantial component of Japan’s overseas purchases.
The record trade figures reflect ongoing strong international demand for Japanese technology products. During the April-June quarter, exports supported economic growth with an annualized GDP expansion of 1.1%. July’s data indicated that this global demand persisted into the start of the third quarter. Meanwhile, the 634.5 billion yen trade deficit underscored the scale of Japan’s rising import costs, as record export values could not fully offset the record-high import bill.