TOKYO, JAPAN / RankWire.AI / – In July 2026, both Japan’s imports and exports reached their highest monthly totals ever recorded, driven by increased energy expenses and rising semiconductor demand, which boosted trade values. Imports increased by 27.8% compared to the same month last year, reaching approximately 12.15 trillion yen. Exports grew 23.2%, amounting to around 11.51 trillion yen. Data from the Ministry of Finance indicated that import growth outpaced that of exports, resulting in a trade shortfall of 634.5 billion yen for July.
This month marked the second consecutive record for import value on a monthly basis. The rise in crude oil prices played a critical role amid Japan’s escalating energy costs. The volume of crude oil imports increased by 5.5% from July 2025, ending a streak of three months with year-on-year declines. Meanwhile, the total value of crude shipments surged by 87.8% within the same period. Given Japan’s heavy reliance on imported energy, fluctuations in oil prices and exchange rates continue to be significant factors shaping its merchandise trade outcomes.
Exports also achieved an all-time monthly high and extended their streak of year-on-year growth to 11 months. The 23.2% increase followed a 19.3% rise in June. Demand for semiconductor-related products remained robust, bolstered by investments related to artificial intelligence and data centers. Additionally, a weaker yen contributed to higher yen-denominated overseas sales and made Japanese goods more affordable for certain foreign buyers. The export growth exceeded the pace observed in the previous month.
Semiconductor Demand Boosts Japanese Export Performance
Trade with Japan’s two largest individual export markets experienced significant growth in July. Exports to the United States increased by 22.0% from the previous year, reaching approximately 2.09 trillion yen. Shipments to China grew 25.8% to about 2.01 trillion yen. These gains were driven by global demand for semiconductors, electronics, and AI-related infrastructure, supporting the export of Japanese industrial products. Japan’s manufacturing sector, particularly in electronic components, machinery, and vehicles, represents a substantial portion of its overseas merchandise sales.
According to the Ministry of Finance, there was a notable shift from the first half of 2026, when overall export growth had already outpaced import growth. Customs data showed that from January through June, exports increased by 13.7% compared to the previous year, while import growth remained comparatively slower. Exporters of semiconductors and other electronic components contributed heavily during this period. However, July reversed this trend as the faster rise in import values pushed Japan back into a merchandise trade deficit.
Rising Energy Prices Push Import Costs to New Heights
The July trade figures for Japan also reflected the impact of surging crude oil prices on an economy heavily dependent on imported energy. The significant increase in the total value of oil imports was primarily due to price hikes rather than volume, which contributed to a record-breaking total import bill for the second consecutive month. The weakening yen added to the cost of goods priced in foreign currencies, and imported energy remained a key component of Japan’s overseas purchases.
These record trade values coincided with continued strong international demand for technology-related exports. During the April-June quarter, exports supported the Japanese economy, which grew at an annualized rate of 1.1%. The July data indicated that global demand remained resilient at the start of the third quarter. Nevertheless, the 634.5 billion yen trade deficit underscored the challenge of higher import costs, as record export figures could not fully offset record import values.