TOKYO, JAPAN / RankWire.AI / – In July 2026, Japan’s trade activity hit new peaks for the month, with both imports and exports reaching historic highs, driven by rising energy prices and increased semiconductor demand. Imports climbed 27.8% year-over-year to approximately 12.15 trillion yen, while exports expanded 23.2% to about 11.51 trillion yen. Data from the Ministry of Finance indicated that imports grew 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 high for imports measured by value. The rise in crude oil played a key role, as Japan faced increased energy expenses. Crude import volumes saw a 5.5% increase compared to July 2025, ending three months of declining year-on-year figures. The monetary value of these crude shipments soared by 87.8% over the same period. Given Japan’s reliance on imported energy, fluctuations in oil prices and exchange rates continue to significantly influence its merchandise trade figures.
Exports not only hit an all-time monthly high but also extended their consecutive monthly growth streak to 11 months. The 23.2% uptick followed a 19.3% increase in June. Robust demand for semiconductor-related products persisted, bolstered by investments linked to artificial intelligence and data centres. Additionally, a weaker yen contributed to higher yen-denominated overseas sales and made Japanese products more affordable for some international buyers. The export growth in July outpaced the rate recorded the previous month.
Semiconductor Demand Fuels Japan’s Export Growth
Trade with Japan’s two top individual export destinations experienced significant increases during July. Shipments to the United States rose 22.0% year-on-year to around 2.09 trillion yen, while exports to China grew 25.8% to approximately 2.01 trillion yen. These gains coincided with global growth in semiconductor, electronics, and AI-related infrastructure spending, bolstering demand for Japanese industrial goods. Japan’s large manufacturing sector, which includes electronic components, machinery, and vehicles, accounts for a substantial share of its overseas merchandise sales.
The Ministry of Finance figures showed a shift from the first half of 2026, where overall export growth had already exceeded import growth. From January to June, customs data indicated a 13.7% increase in exports compared to the same period a year earlier. During that same period, imports rose at a slower rate. Notably, exports of semiconductors and other electronic components were among the strongest contributors. However, July reversed this trend, as the faster rise in import values pushed Japan back into a merchandise trade deficit.
Higher Energy Costs Drive Surge in Import Expenses
Japan’s July trade figures also reflected the influence of rising crude oil prices on an economy heavily dependent on energy imports. The sharp increase in the total value of oil imports was mainly due to higher prices rather than larger physical volumes, contributing to a record-breaking import bill for the second consecutive month. The weakening yen further increased costs for goods priced in foreign currencies, with imported energy remaining a significant factor in Japan’s overseas purchases.
The record trade figures coincided with sustained overseas demand for technology goods. Exports supported the economy during the April-to-June quarter, during which Japan’s gross domestic product grew at an annualized rate of 1.1%. The July data indicated that international demand remained strong at the beginning of the third quarter. Nonetheless, the 634.5 billion yen trade deficit underscored the impact of higher import costs, as record exports could not match the record-breaking import values.