TOKYO, Japan / ConSynSer / – In September, Japan experienced its 13th consecutive month of rising exports, yet a faster increase in imports resulted in a trade deficit of 536.6 billion yen. The Ministry of Finance released preliminary data indicating exports grew 16.7% year on year to 10.9723 trillion yen, while imports rose 18.9% to 11.5088 trillion yen. Xinhua News Agency estimated the deficit at approximately $3.4 billion.
The export growth was primarily driven by robust demand for semiconductors and chip-making machinery. Additionally, shipments supported by products related to artificial intelligence contributed, according to Xinhua. Despite this, September marked Japan’s fifth straight month of trade deficits, although the gap significantly narrowed from 1.11 trillion yen in August. The pace of import growth slowed from 28.0% in August, partly due to a decline in crude oil arrivals.
Energy costs continue to exert considerable pressure on Japan’s trade balance. As the country imports nearly all of its oil and has relied on access to the Strait of Hormuz, disruptions caused by conflicts in the Middle East have complicated supply routes. Importers have had to pay higher prices for shipments via alternative routes. Brent crude oil prices have increased from around $70 a barrel in February to approximately $110 a barrel.
Trade values hit new records in the first half of the fiscal year
Between April and September, Japan’s trade deficit reached 2.81 trillion yen, roughly $17.8 billion, nearly doubling compared to the same period last year. Exports for this half-year increased by 18.4% to 63.5 trillion yen, while imports surged 20.4% to 66.3 trillion yen. Both figures set new highs for Japan, reflecting active trade alongside elevated energy prices.
The rising oil prices are impacting various sectors, including plastics manufacturing and shipping industries. Meanwhile, exporters continue to benefit from strong global demand for chips and related equipment. Japan’s trade figures had previously reached records in July, when imports exceeded exports. The current data extend a year marked by robust yet uneven trade performance.
Focus on Bank of Japan’s interest rate trajectory
The yen’s weakness continues to elevate the cost of imports, with the US dollar trading near 150 yen. The Bank of Japan has been gradually increasing interest rates, partly to support the currency. Last month, it raised its benchmark rate to 1.25% from 1.0%, reaching a 31-year high. The policy board is scheduled to meet again next week.
The central bank aims for an inflation target of about 2%. Experts suggest that oil prices are unlikely to decrease soon, implying that import costs will remain high. The Ministry of Finance’s upcoming monthly report will reveal whether chip-driven export growth can keep pace with rising energy expenses. Japan’s trade results continue to be closely linked to fluctuations in global energy markets.