Japan’s trade deficit narrowed to ¥634.58 billion ($4.01 billion) in July, undershooting market expectations for a ¥680 billion shortfall, according to data released by the Ministry of Finance on Thursday.
Exports rose 23.2% year-on-year, exceeding forecasts of 19.9% growth and accelerating from June’s 19.3% increase. Shipments of specialty chemicals, manufactured goods, electronics and automobiles were the primary drivers of the expansion.
Imports climbed 27.8% year-on-year, outpacing the 26.5% estimate and up from 25.4% in June. Energy imports, led by oil and gas, surged by 53.5% in value terms, with petroleum imports alone rising 87.8%. The increase reflected elevated global commodity prices amid geopolitical tensions tied to the U.S.-Iran conflict. Electrical equipment imports, including semiconductors and wiring, also posted sharp gains as domestic firms expanded AI-related infrastructure.
The trade gap widened from a ¥409.9 billion deficit in June, underscoring persistent import growth despite strong export momentum.
