TOKYO, Japan / ConSynSer / – In September, Japan recorded its 13th consecutive month of rising exports, yet the country faced a trade deficit of 536.6 billion yen due to faster-growing imports. Data from the Ministry of Finance indicated that exports increased by 16.7% year on year to 10.9723 trillion yen. Meanwhile, imports grew by 18.9% to reach 11.5088 trillion yen. According to Xinhua News Agency, the deficit was approximately $3.4 billion.
The surge in exports was primarily driven by robust demand for semiconductors and equipment used in chip manufacturing. Additionally, products related to artificial intelligence contributed to the shipment growth, as reported by Xinhua. Despite this, September marked Japan’s fifth consecutive 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.
Rising energy costs continue to exert substantial pressure on Japan’s trade balance. The country relies on importing almost all of its oil and has depended heavily on access to the Strait of Hormuz, which has been disrupted by conflicts in the Middle East. To secure shipments through alternative routes, importers have faced higher costs, with Brent crude oil prices rising from around $70 a barrel in February to about $110 a barrel.
Trade values hit record highs in first half of fiscal year
For the April-to-September period, Japan’s trade deficit reached 2.81 trillion yen, approximately $17.8 billion, nearly doubling compared to the previous year. Export figures for this half-year increased by 18.4% to 63.5 trillion yen, while imports surged by 20.4% to 66.3 trillion yen. Both these figures set new records for Japan, reflecting a robust trade environment amid elevated energy prices.
The escalation in oil prices is impacting a broad spectrum of industries, including plastics and shipping. Conversely, exporters continue to benefit from global demand for chips and related manufacturing equipment. Japan’s trade figures had previously reached records in July, when imports exceeded exports. The current data highlights a year of vigorous yet inconsistent trade performance.
Focus on Bank of Japan’s interest rate trajectory
The weakening yen, which is trading around 150 yen against the US dollar, continues to push up the cost of imports. To support the currency, the Bank of Japan has been gradually raising interest rates, increasing its benchmark rate to 1.25% from 1.0% last month—a level not seen in 31 years. The bank’s policy board is scheduled to meet again next week.
With an inflation target of about 2%, analysts believe that rising oil prices are unlikely to decrease anytime soon, which will keep import bills high. The Ministry of Finance’s upcoming monthly report will reveal whether export growth driven by chips can sustain itself amid rising energy costs. Japan’s trade outlook remains closely linked to global energy market developments.