TOKYO, JAPAN / RankWire.AI / – In July 2026, Japan experienced its highest monthly trade values on record for both imports and exports, driven by increased energy costs and strong semiconductor demand that boosted trade figures. Imports expanded by 27.8% year-over-year to approximately 12.15 trillion yen, while exports grew by 23.2% to about 11.51 trillion yen. Data from the Ministry of Finance revealed that imports outpaced exports, resulting in a trade deficit of 634.5 billion yen for the month.
This marks the second consecutive month that Japan’s imports have set a new record in terms of value. The surge in crude oil imports played a significant role as Japan faced escalating energy prices. Crude volumes imported increased by 5.5% compared to July 2025, ending a three-month decline on a year-on-year basis. During the same period, the value of crude shipments soared by 87.8%. Given Japan’s heavy reliance on imported energy, fluctuations in oil prices and exchange rates continue to be key influences on its trade statistics.
Exports also achieved an all-time high for a single month, extending their streak of year-on-year growth to 11 months. The 23.2% rise was an acceleration from June’s 19.3% increase. Demand for semiconductor-related items remained robust, bolstered by investments linked to artificial intelligence and data centers. A weaker yen increased the yen value of overseas sales and rendered Japanese goods more competitive for some foreign buyers. The export growth in July surpassed the pace observed during the previous month.
Semiconductor Demand Boosts Japan’s Export Performance
Trade with Japan’s two biggest individual export destinations surged in July. Exports to the United States climbed 22.0% year-over-year, reaching roughly 2.09 trillion yen. Meanwhile, shipments to China increased by 25.8% to around 2.01 trillion yen. These gains were supported by heightened global investment in semiconductors, electronics, and AI-related infrastructure, fueling demand for Japanese industrial products. Japan’s manufacturing sector, particularly in electronic components, machinery, and vehicles, accounts for a significant share of its foreign merchandise sales.
According to Ministry of Finance data, there was a notable shift from the first half of 2026, during which overall export growth had already outstripped that of imports. Customs-based exports from January through June grew by 13.7% compared to the same period the previous year. Imports, however, increased at a slower rate during this period. The strongest contributors to export growth were electronic components and semiconductors. Nonetheless, July’s figures reversed this trend as the faster increase in import values resulted in Japan slipping back into a merchandise trade deficit.
Rising Energy Prices Elevate July’s Import Costs
The July trade data also underscored the impact of higher crude oil prices on Japan’s economy, which relies heavily on energy imports. Although the physical volume of oil imports only increased by 5.5%, the value of those imports surged significantly, contributing to a record-breaking total import bill for the second month in a row. The depreciation of the yen further increased the cost of foreign-priced goods, while imported energy remained a dominant component of Japan’s overseas purchases.
These record trade figures coincided with continued strong global demand for Japanese technology exports. During the April-to-June quarter, exports supported the economy as gross domestic product grew at an annualized rate of 1.1%. July’s data demonstrated that international demand remained vigorous at the beginning of the third quarter. However, the 634.5 billion yen trade deficit highlighted the extent of Japan’s higher import costs, as record exports were unable to offset the record-high import values.