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The Finance Ministry’s preliminary figures released on October 21 showed exports rising 16.7 percent from a year earlier to support the 13th straight month of gains while imports climbed 18.9 percent. Semiconductor and artificial intelligence-related shipments led the export growth with increases exceeding 40 percent in some categories alongside a 15 percent advance in automobile exports. The resulting shortfall narrowed from 1.1 trillion yen in August but still exceeded economist expectations as energy costs remained a drag.
Cumulative data from the ministry for the April-to-September first half of fiscal 2026 placed the trade deficit at 2.81 trillion yen, equivalent to $17.8 billion and nearly double the level from the prior year. Exports for the period reached a record 63.5 trillion yen, up 18.4 percent year on year, while imports hit 66.3 trillion yen after a 20.4 percent surge that also marked an all-time high. The ministry assessment tied the wider gap directly to elevated energy prices flowing from disruptions in traditional supply lines.
Japan relies on the Middle East for more than 90 percent of its crude oil with the bulk previously transiting the Strait of Hormuz, according to an East Asia Forum assessment of the 2026 crisis. Conflict involving Iran has effectively blocked that route since March, forcing longer detours around Africa or through alternative pipelines that carry added freight and insurance expenses. The shift has driven Brent crude prices from around $70 a barrel in February to near $100 with interim peaks above $110, market data shows.
Government coordination with the International Energy Agency facilitated one of the largest-ever coordinated stock releases to stabilize supplies while private firms diversified naphtha sourcing to countries including the United States and Algeria, the East Asia Forum report noted. Refineries optimized for Middle Eastern grades encountered processing inefficiencies with the new blends, adding to overall costs that fed through to sectors ranging from plastics to shipping. The ministry data indicated crude oil imports still jumped more than 50 percent in value during September despite some easing in volume arrivals.
September import growth slowed from the 28 percent pace recorded in August partly as crude shipments moderated, the ministry figures show, helping contain that month’s deficit below forecasts. Exports to the United States advanced more than 20 percent while those to China gained nearly 9 percent amid sustained demand for high-tech components. The latest trade readings arrive as the Bank of Japan prepares policy deliberations later this month that will incorporate the external pressures on growth.
