TOKYO, Japan / ConSynSer / – Japan’s exports experienced a 13th consecutive month of growth in September, yet the country faced a trade deficit of 536.6 billion yen due to imports rising at a faster pace. According to preliminary figures from the Ministry of Finance, exports increased by 16.7% year on year to 10.9723 trillion yen, while imports grew by 18.9% to 11.5088 trillion yen. Xinhua News Agency estimated the trade deficit at around $3.4 billion.
The surge in exports was driven primarily by strong global demand for semiconductors and equipment used in chip manufacturing, with products related to artificial intelligence also contributing to shipment increases, according to Xinhua. 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 imports.
Energy costs continue to exert substantial pressure on Japan’s trade balance, as the country relies heavily on oil imports and has depended on the Strait of Hormuz for supply, a route disrupted by conflicts in the Middle East. Importers have faced higher costs to secure shipments through alternative routes, with Brent crude prices climbing from around $70 a barrel in February to approximately $110 a barrel.
Trade values hit record highs in the first half of the fiscal year
For the April-September period, Japan’s trade deficit totaled 2.81 trillion yen, roughly $17.8 billion, almost double the figure from the previous year. During this half-year, exports increased by 18.4% to 63.5 trillion yen, while imports rose by 20.4% to 66.3 trillion yen, both setting new records for Japan and reflecting robust trade activity amid rising energy prices.
The escalation in oil prices is impacting a broad spectrum of industries, including plastics and shipping, even as exporters continue to benefit from persistent global demand for chips and related equipment. Japan’s trade figures had previously reached records in July, when imports outstripped exports, and the latest data continue to demonstrate a year marked by strong yet uneven trade performance.
Focus on Bank of Japan’s Monetary Policy Path
A declining yen continues to elevate the costs of imports, with the US dollar trading at approximately 150 yen, prompting the Bank of Japan to gradually raise interest rates in an effort to support the currency. It increased its benchmark rate to 1.25% from 1.0% last month, reaching a 31-year high, with its policy board scheduled to meet again next week. The bank’s inflation target remains around 2%, but analysts suggest that with oil prices unlikely to decline soon, import expenses are likely to stay high. The upcoming monthly report from the Ministry of Finance will reveal whether export growth driven by chips can keep pace with rising energy costs, as Japan’s trade performance remains closely connected to developments in global energy markets.