By Makiko Yamazaki
TOKYO, Aug 20 (Reuters) – Japan’s imports hit a monthly record in July as elevated oil prices drove up energy costs and inflationary pressures, while exports also climbed to an all-time high on a weaker yen and robust semiconductor-related demand.
Total imports by value grew 27.8% from a year earlier to 12.1 trillion yen ($76.39 billion), data showed on Thursday, hitting a fresh record for the second straight month and exceeding market forecasts for a 26.5% increase.
Japan’s crude oil import volumes have rebounded as alternative supplies, mainly from the United States, replace Middle Eastern shipments disrupted by the conflict in the Middle East.
The persistence of wholesale inflation, together with resilient exports, is likely to support the case for the Bank of Japan to continue to normalise monetary policy, as the central bank is set to raise rates as soon as September.
“The recovery in crude volumes, combined with persistently high oil prices and larger shipments of pricier U.S. crude, has been pushing up the value of imports,” said Koki Akimoto, an economist at Daiwa Institute of Research.
Crude oil import volumes rose 5.5% from a year before, the first increase in four months, while the total value jumped 87.8%.
Exports surged 23.2% year-on-year to a record 11.5 trillion yen, more than the median market forecast for a 19.9% increase and following a 19.3% rise in June, thanks to strong demand tied to AI-related data centres. The yen’s sharp falls have also made the price of Japanese goods more competitive for overseas buyers.
The strength in exports underscores resilient global demand, supporting an economy increasingly reliant on overseas shipments to offset weak domestic demand.
The trade figures follow separate data this week showing Japan’s economy expanded for a third consecutive quarter in April-June, with strong exports helping offset weak private consumption and business investment.
Exports to the United States in July rose 22% from a year earlier, while shipments to China were up 25.8%, the data showed.
As a result, Japan recorded a trade deficit of 634.5 billion yen in July, compared with a forecast for a deficit of 680 billion yen.
The war in the Middle East earlier this year disrupted shipping through the Strait of Hormuz and triggered a surge in crude oil, petrochemical and other commodity prices, raising Japan’s import bill because the country relies heavily on overseas energy supplies.
Although oil prices retreated in June after shipping routes were partially restored, the impact on import values typically appears with a lag because customs-based import prices reflect contracts agreed weeks earlier.
Higher commodity and energy costs have also fed through supply chains, adding to inflationary pressures and pushing up producer prices by 7.2% in July from a year earlier.
($1 = 158.3900 yen)
(Reporting by Makiko Yamazaki; Editing by Sam Holmes)
