JP: Merchandise Trade

Highlights

Japanese export values rose at a faster-than-expected pace of 19.3% on the year to ¥10.93 trillion in June for the 10th straight rise after rising a revised 16.8% in May as the base effect of high U.S. tariffs on autos and metals has faded and global demand for computer chips and non-ferrous metals remains strong. The June increase was led by automobiles, computer chips and non-ferrous metals, largely as seen in recent months. The June export amount was the second largest after the record high of ¥10.98 trillion in March 2026.

Import values rose for the fifth straight month, surging 25.2% to a record ¥11.34 trillion, following a 9.8% increase in May, as the sharp depreciation of the yen compared to a year earlier made imports more expensive. The gain was driven by higher values of crude oil, computer chips and non-ferrous metals.

The June trade data showed import volumes rose 1.1% on the year for their first rise in three months (vs. -6.8% in May) and import values of crude oil also rebounded 59.3% after many months of decline (vs. -28.5% in May). Japanese refineries have been bringing more crude oil from the United States and other producers to partly offset the impact of the blockade of the Strait of Hormuz during the Iran war, which has slashed Gulf state oil production and exports.

Japan’s trade balance posted a second straight deficit, with the shortfall widening to ¥409.91 billion from a revised ¥391.79 billion in May. It compares with a ¥122.27 surplus in June 2025.

Details:
Japan June exports +19.3% y/y (May revised +16.8%), 10th straight rise; median forecast +18.0%

Japan June imports +25.4% y/y (May +12.5%), 5th straight rise; median forecast +20.0%

Japan June trade deficit ¥406.9 bln (May revised ¥391.79 bln deficit); 2nd straight deficit; median forecast ¥47.25 bln deficit

Japan June import amount of ¥11.3 trln, largest on record

Japan June import amount from U.S. (¥1.59 trln) and China (¥2.65 trln), largest on record

Japan June exports rise to ¥10.93 trln, 2nd largest on record after record high of ¥10.98 trln hit in March 2026, as U.S. tariff base effect on autos fades

Japan June export y/y rise led by autos, computer chips, non-ferrous metals

Japan June import y/y rise led by crude oil, computer chips, non-ferrous metals

Japan June exports to U.S. +13.0% y/y, 4th straight rise (May revised +12.3%), led by autos, scientific optical equipment, heavy electrical equipment

Japan June exports to EU +20.3%, 11th straight rise (May revised +14.0%), led by autos, chipmaking equipment, organic compounds (cosmetics, etc.)

Japan June exports to China +17.6% y/y, 4th straight rise (May +17.9%), led by computer chips, raw materials, non-ferrous metals

Market Consensus Before Announcement

Japanese exports are expected to rise for a 10th straight month from a year earlier in June, while imports are seen rising for a fifth consecutive month as the resource-poor country continues to diversify its crude oil purchases away from the Middle East. Robust imports, coupled with a weaker yen against the dollar, are expected to leave the trade balance in a modest deficit for a second straight month.

Exports are forecast to increase 18.0 percent from a year earlier in June after rising a revised 16.8 percent in May. The annual increase in May was driven by shipments of computer chips, automobiles and non-ferrous metals.

Japan's exports have remained resilient despite heightened geopolitical tensions that have fueled concerns over raw material supplies and the global economic outlook. Shipments also continued to grow across all major destinations, including the United States, showing little sign of slowing despite ongoing trade disputes stemming from Trump tariffs and worsening diplomatic relations with China.

Imports are projected to increase 20.0 percent from a year earlier in June after rising 12.5 percent in May, when purchases of computer chips, smartphones and non-ferrous metal ores led the gains. The trend appears to have continued in June, with the Ministry of Finance (MOF) data released on July 7 showing that imports during the first 20 days of the month rose 21.5 percent from the same period a year earlier.

As a result, the trade balance is expected to post a modest deficit of 47.25 billion yen in June after recording a revised deficit of 391.79 billion yen in May. The MOF data showed that the trade balance for the first 20 days of June registered a deficit of 552.6 billion yen, widening 73.1% from a deficit of 319.2 billion yen in the same period of 2025.

Definition

Merchandise Trade balance measures the difference between imports and exports of both tangible goods and services. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade.

Description

Japan's merchandise trade balance measures visible trade and excludes services. Specifically it is the difference between imports of goods and exports of goods. A positive value indicates a trade surplus (exports exceed imports) while a negative value indicates a trade deficit (imports exceed exports). Movements in the trade balance reflect altered demand for Japanese exports which subsequently impact the yen's value and directly affect GDP growth because of the economy's dependence on trade.

The report gives insight into changing trends regarding Japanese trade. Such developments are especially important for Japan, which is an export-oriented economy that has historically experienced large trade surpluses and any change can have a dramatic effect on the domestic economy. Typically the headline number is the change from the previous year in yen along with the percentage change in exports and in imports from the previous year.

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