Japan recorded a trade deficit of approximately 634.5 billion yen in July 2026, marking the third consecutive month of deficits [1, 2, 3, 4, 5]. Imports rose 27.8% year-on-year to a record high of about 12.1 trillion yen for the second month in a row, outpacing exports, which increased 23.2% to a record 11.5 trillion yen and continued an 11-month growth streak [2, 3, 4, 5].
Crude oil import volumes increased 5.5% year-on-year in July, reversing a four-month decline, while the value of crude oil imports surged 87.8% to approximately 1.41 trillion yen due to soaring global prices and supply disruptions [2, 3, 4, 5]. The conflict in the Middle East and disruptions in shipping through the Strait of Hormuz have driven up Japan's crude oil import costs [2, 3, 4, 5]. Meanwhile, crude imports from the Middle East fell 32.8% in volume, partly offset by nearly ninefold growth in imports from the US [4, 5].
Naphtha and other volatile oil imports fell 23.2% in total volume [4, 5]. Daiwa Institute economist Koki Akimoto said, "The recovery in crude volumes, combined with persistently high oil prices and larger shipments of pricier US crude, has been pushing up the value of imports" [2].
Exports grew 23.2% year-on-year to about 11.5 trillion yen, boosted by an 11.2% depreciation of the yen against the US dollar compared with July 2025, which improved export competitiveness [2, 4, 5]. Exports to the US rose about 22%, and those to China increased 25.8% [2, 4].
SMBC Nikko Securities senior economist Koya Miyamae expects Japan's trade deficit to continue throughout 2026 and possibly exceed 5 trillion yen for the year [3]. July data suggest the trade gap is under pressure from high import costs despite strong exports.
July’s data conclude the latest update in Japan’s ongoing trade challenges, with next month’s figures due in September 2026.
