Japan posts third straight trade deficit as July imports set record

Iran war, effectively closed Strait of Hormuz send Japan’s energy costs soaring

Japan’s trade deficit extended to a third straight month in July, totaling 634.5 billion yen ($4 billion), as imports and exports both set records, the Finance Ministry said in a preliminary report Thursday, Aug. 20.

Imports surged 27.8% from the same month a year earlier to a seasonally adjusted 12.15 trillion yen ($77 billion), the ministry reported. Exports rose 23.2% to 11.51 trillion yen ($73 billion).

Soaring energy costs and a weak yen helped extend the deficit, government data showed. The war in Iran has sent crude oil prices soaring, and Japan, which imports almost all of its oil, previously relied heavily on crude from the Middle East shipped through the Strait of Hormuz — a route that remains effectively closed.

Auto exports to the United States and other nations remained strong, and shipments of semiconductors and other electronic devices were also healthy. Japan’s exports have now grown every month for almost a year.

The July figures mark a third straight month of red ink for Japan’s trade balance, with record import values led by energy outpacing record export volumes.