TOKYO, Japan / ConSynSer / – Japan’s trade balance showed a deficit of 536.6 billion yen in September, even as exports marked their 13th consecutive monthly increase. The Ministry of Finance preliminary data indicated that exports rose 16.7% year on year to 10.9723 trillion yen, while imports grew faster at 18.9% to 11.5088 trillion yen. According to Xinhua News Agency, the trade shortfall was approximately $3.4 billion.
The growth in exports was primarily driven by robust demand for semiconductors and equipment used in chip manufacturing. Additionally, products associated with artificial intelligence contributed to the shipment increases, as reported by Xinhua. Despite this, September marked Japan’s fifth straight month of trade deficits, although the gap significantly decreased from 1.11 trillion yen in August. Import growth slowed from 28.0% in August, partly due to a decline in crude oil arrivals.
Energy expenses continue to exert significant pressure on Japan’s trade balance. The country relies almost entirely on oil imports and has depended on access to the Strait of Hormuz, which has been disrupted by conflicts in the Middle East. As a result, importers face higher costs to secure shipments through alternative routes. Brent crude oil has surged from about $70 a barrel in February to approximately $110 a barrel.
Trade values hit record highs in the first half of fiscal year
For the April-to-September period, Japan experienced a trade deficit of 2.81 trillion yen, roughly $17.8 billion, nearly double the figure from the previous year. During this half-year, exports increased by 18.4% to 63.5 trillion yen, while imports jumped 20.4% to 66.3 trillion yen. These figures set new records for Japan, reflecting vigorous trade activity amid rising energy costs.
The escalation in oil prices is impacting various sectors, including plastics and shipping industries. Meanwhile, exporters continue to benefit from strong global demand for chips and related equipment. Japan’s trade figures had also reached records in July, when imports surpassed exports. The current data highlight a year of vigorous but uneven trade performance.
Market focus shifts to Bank of Japan’s interest rate trajectory
A declining yen continues to increase the cost of imported goods, with the US dollar trading at approximately 150 yen. To support the currency, the Bank of Japan has been gradually raising interest rates, raising its benchmark rate to 1.25% from 1.0% last month, the highest level in 31 years. The policy board is scheduled to meet again next week.
The central bank aims for an inflation target around 2%. Analysts suggest that oil prices are unlikely to decrease soon, implying that import costs will remain elevated. The Ministry of Finance’s upcoming monthly report will reveal whether export growth driven by chips can keep pace with rising energy expenses. Japan’s trade outcomes remain closely linked to developments in global energy markets.