TOKYO, JAPAN / RankWire.AI / – In July 2026, Japan achieved unprecedented trade figures with both imports and exports hitting all-time highs, driven by surging energy expenses and robust demand for technology products. Imports rose by 27.8% compared to the previous year, reaching approximately 12.15 trillion yen. Exports increased by 23.2% to around 11.51 trillion yen. The Ministry of Finance announced a trade shortfall of 634.5 billion yen, as the faster growth in imports outpaced overseas shipments for the month.
This marked the second consecutive month that imports hit record levels, with crude oil playing a significant role in the surge. Japan’s crude oil imports increased by 5.5% in volume compared to July 2025, while the value of these shipments skyrocketed by 87.8% within the same period. These figures highlight the impact of soaring energy prices amid Japan’s continued heavy reliance on imported oil and other fuels for domestic use.
Exports also set a new monthly record, maintaining an 11-month streak of year-on-year growth. The 23.2% rise in July followed a 19.3% increase in June. The export growth was notably supported by semiconductor-related products, with demand driven by artificial intelligence infrastructure and data centre developments. The depreciation of the yen further boosted the yen value of overseas sales, amplifying Japan’s overall export gains.
Technological exports drive the export expansion
During July, the United States and China continued to be the primary destinations for Japanese goods. Exports to the US grew 22.0% year-on-year to approximately 2.09 trillion yen, while shipments to China rose 25.8%, reaching about 2.01 trillion yen. Japan’s manufacturing sector, which supplies vehicles, machinery, electronic components, and semiconductor equipment to major international markets, remains a crucial component of the country’s monthly merchandise trade performance.
The July figures build on the strong trade momentum observed during the first half of 2026, when exports from January to June expanded by 13.7% over the same period in the previous year. During that six-month span, imports increased at a slower rate. Japan Customs data reveals that electronic components and semiconductor-related products were among the key contributors to export growth. However, the month of July shifted the trade balance, as rising import values outstripped the record-high exports, resulting in a trade deficit.
Crude oil price hikes significantly impact import values
The sharp increase in crude oil prices has had a tangible effect on Japan’s import expenses. While physical volumes of oil imports grew modestly, the overall import value soared due to rising prices, setting a new monthly record. Currency fluctuations also played a role, increasing the yen cost of many imported goods priced in foreign currencies. Energy remains a dominant component of Japan’s import basket, which explains why the escalation in oil prices had such a pronounced influence on the total value of imports from overseas.
Entering the third quarter, Japan’s merchandise account registered record trade flows in both directions. The demand for technology-related exports sustained the growth in outbound shipments, whereas rising energy costs contributed to a larger import bill. The 634.5 billion yen deficit indicates that, despite record export levels, they could not fully offset the elevated costs of imports. Consequently, July encapsulated a month of strong external sales coupled with sharply rising purchasing expenses, offering one of the clearest pictures of Japan’s expanding trade figures in 2026.