TOKYO, Japan / ConSynSer / – In September, Japan’s exports marked a 13th consecutive month of growth, though a faster increase in imports resulted in a trade deficit of 536.6 billion yen. The Ministry of Finance reported preliminary data showing exports up 16.7% year on year at 10.9723 trillion yen, while imports climbed 18.9% to 11.5088 trillion yen. Xinhua News Agency estimated the deficit at around $3.4 billion.
The export expansion was driven mainly by strong demand for semiconductors and chip-making machinery. Additionally, products related to artificial intelligence contributed to the shipment increase, according to Xinhua. Despite September being Japan’s fifth straight month of trade deficits, the gap narrowed significantly from 1.11 trillion yen in August. The growth rate of imports slowed from 28.0% in August, partly due to a decline in crude oil arrivals.
Energy prices continue to exert significant pressure on Japan’s trade balance. Since Japan imports nearly all its oil and relies on access to the Strait of Hormuz, disruptions caused by Middle Eastern conflicts have affected shipments. Importers have faced higher costs to secure supplies through alternative routes, with Brent crude rising from approximately $70 a barrel in February to about $110 a barrel.
Trade values hit historic highs in the first half of fiscal year
Between April and September, Japan’s trade deficit reached 2.81 trillion yen, roughly $17.8 billion, nearly doubling compared to the previous year. Exports for this period increased by 18.4% to 63.5 trillion yen, while imports surged 20.4% to 66.3 trillion yen. Both figures set records for Japan, reflecting vigorous trade activity amidst rising energy costs.
Rising oil prices are impacting various sectors, including plastic manufacturing and shipping. Meanwhile, exporters continue to benefit from global demand for chips and related equipment. Japan’s trade figures had also reached records in July, when imports exceeded exports. The current data indicate a year of strong yet uneven trade performance.
Market expectations for the Bank of Japan’s interest rate trajectory
A declining yen continues to increase the cost of imported goods, with the US dollar trading near 150 yen. The Bank of Japan has been gradually raising interest rates, partly to support the currency. It raised its benchmark rate to 1.25% from 1.0% last month, reaching a 31-year high. The policy board is scheduled to meet again next week.
The central bank’s inflation target is approximately 2%. Analysts suggest that oil prices are unlikely to decrease soon, which indicates that import expenses will stay high. The Ministry of Finance’s upcoming monthly report will reveal whether export growth driven by chips can keep pace with rising energy costs. Japan’s trade performance remains strongly linked to developments in global energy markets.