Japan’s first-half trade deficit narrows amid export growth
Japan’s trade shortfall narrowed 57% in January-June as exports reached a record while Middle East oil imports declined amid disruption at the Strait of Hormuz.
- Japan's trade deficit for the first half of 2026 narrowed by 57% year-on-year to 1.0144 trillion yen, marking the 10th consecutive half-year with a deficit.
- The narrowing was driven by a 13.7% increase in exports, which reached a record high for a first-half period, fueled by strong vehicle and semiconductor shipments.
- Imports also rose by 10.7%; however, a significant drop in the value of crude oil and petroleum product imports from the Middle East contributed to the smaller deficit.
Japan’s customs-cleared trade deficit narrowed by 57% year on year to 1.0144 trillion yen in the first six months of 2026, preliminary figures released by the Finance Ministry on Wednesday (July 22) showed.
Despite the sharp contraction, the country remained in deficit for a 10th consecutive half-year period.
Exports climbed 13.7% to 60.6606 trillion yen, the highest first-half figure since comparable statistics began in 1979. Shipments of semiconductors and other electronic components to China rose 64.4%, while vehicle exports to the European Union surged 44.9%, led by electric vehicles.
Imports increased 10.7% to 61.675 trillion yen, the second-highest first-half total on record. However, the value of crude oil imports from the Middle East dropped 20.5%, while purchases of petroleum products from the region, including naphtha, fell 52.6% amid the effective closure of the Strait of Hormuz.
The weak yen raised the reported value of trade in both directions.
The dollar averaged 157.75 yen during the period, leaving the Japanese currency 5.5% weaker than a year earlier.
Japan’s trade surplus with the United States contracted by 23.4% to 3.1506 trillion yen, partly because of increased crude oil imports.
Trade with China produced a deficit of 4.6436 trillion yen.
For June alone, Japan recorded a trade deficit of 406.9 billion yen, its second successive monthly shortfall.
Exports and imports both reached their highest levels for any June, with vehicle shipments to the United States rising 34.5% and crude oil imports from the country soaring 907.4%.
[Copyright The Jiji Press, Ltd.]
