TOKYO, JAPAN / RankWire.AI / – In July 2026, Japan achieved historic peaks in both its imports and exports, primarily fueled by rising energy prices and strong semiconductor demand, which boosted trade values. Imports increased by 27.8% year-over-year to approximately 12.15 trillion yen. Exports grew 23.2% to about 11.51 trillion yen. Data from the Ministry of Finance indicated that imports expanded at a faster rate than exports, resulting in Japan posting a trade shortfall of 634.5 billion yen for the month.
This month marked the second consecutive record in import value. The increase in crude oil imports played a significant role, as Japan faced higher energy costs. The volume of crude oil imported rose by 5.5% compared to July 2025, ending a three-month streak of declines on a year-on-year basis. The worth of these crude shipments surged by 87.8% over the same period. Given Japan’s heavy reliance on imported energy, fluctuations in oil prices and exchange rates continue to be critical factors influencing its merchandise trade figures.
Meanwhile, exports hit an all-time monthly high, extending their growth streak to 11 consecutive months. The 23.2% rise followed a 19.3% increase in June. Demand for semiconductor-related products persisted robustly, bolstered by investments related to artificial intelligence and data centres. Additionally, a weaker yen contributed to the increased yen value of exports and made Japanese goods more affordable for certain foreign buyers. The export growth in July outpaced that of the previous month.
Semiconductor Demand Bolsters Japan’s Export Performance
Trade with Japan’s two largest individual export destinations saw substantial growth in July. Exports to the United States rose 22.0% from the previous year, reaching around 2.09 trillion yen. Shipments to China increased by 25.8%, totaling roughly 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 products. Japan’s extensive manufacturing sector in electronic components, machinery, and vehicles contributes significantly to its international merchandise sales.
According to the Ministry of Finance, there was a notable shift from the first half of 2026, during which overall export growth already exceeded that of imports. Customs data showed that from January through June, exports increased by 13.7% compared to the same period in the previous year. During this time, import growth was more modest. Exports of semiconductors and other electronic components were among the strongest contributors. Nevertheless, July saw a reversal of this trend, as faster growth in import values pushed Japan back into a merchandise trade deficit.
Rising Energy Costs Push Import Expenses to New Highs
Japan’s July trade figures also reflected the impact of soaring crude oil prices on an economy that relies heavily on energy imports. The significant increase in oil import values was largely due to higher prices rather than increased physical volume. This disparity contributed to the record-breaking total import bill for the second month in a row. The weak yen further raised the cost of goods imported in foreign currencies, with imported energy remaining a key component of Japan’s overall overseas purchases.
These record trade figures coincide with continued strong overseas demand for technology products. Exports supported Japan’s economy during the April-June quarter, when GDP grew at an annualized rate of 1.1%. The July data indicated that international demand remained resilient at the beginning of the third quarter. Conversely, the 634.5 billion yen trade deficit highlighted the impact of rising import costs, as record exports could not offset record import values.