Japan exports rise 19% in June as imports gain 25%

Imports climb 25% on higher oil costs and weak yen

Japan recorded a trade deficit of 406.9 billion yen ($2.5 billion) in June, swinging from a 122 billion yen surplus posted a year earlier, according to the Ministry of Finance. Imports surged 25% to 11.3 trillion yen as the war in Iran disrupted oil shipments through the Strait of Hormuz, driving Japan — which imports virtually all of its crude oil — to nearly quintuple its purchases of U.S. oil.

Exports rose 19% to 10.9 trillion yen, powered by shipments of semiconductor equipment to markets including the United States and China. A weak yen contributed to both sides of the trade balance. Because much of Japan’s trade is denominated in dollars, the yen’s slide from roughly 140 per dollar a year ago to about 163 per dollar today inflates the yen-denominated value of every transaction. The same currency dynamic supports Japanese exporters by making their goods cheaper in foreign markets while raising the cost of imported food, fuel, and raw materials for households and businesses.

The deficit marks the second consecutive month of red ink for Japan, adding to a string of trade shortfalls over the past year as the rising cost of resource imports has outpaced gains in export receipts.