| Consensus | Consensus Range | Previous | Revised | |
| Balance | ¥-670.70B | ¥-708.80B to ¥-250.0B | ¥-406.9B | ¥-409.93B |
| Imports - Y/Y | 26.5% | 21.0% to 29.2% | 25.4% | |
| Exports - Y/Y | 21.2% | 19.0% to 23.8% | 19.3% |
Market Consensus Before Announcement
Japanese exports are projected to increase sharply in July, rising for an 11th straight month on the year and extending the recent upward trend on robust global demand for semiconductors, chipmaking equipment and automobiles. Imports are expected to grow for a sixth consecutive month as the resource-poor country scrambles to diversify its sources of oil purchases away from the Middle East, pushing up import costs.
Robust imports, also boosted by the yen’s weakness, are seen pushing the trade balance into a deficit for a third straight month in July, at 670.70 billion yen, following a deficit of 409.93 billion yen a month earlier.
Japanese exports are expected to remain resilient despite additional U.S. tariffs and ongoing deterioration in diplomatic relations with China, as exports to both countries climbed for the four months through June, with Japanese auto exports to the U.S. pointing to a strong recovery. Exports are seen rising 21.2 percent on the year in July after jumping a revised 19.3 percent a month earlier.
The value of exports in June climbed to the second-highest level on record at a revised 10.93 trillion yen, led by increases in automobiles, computer chips and non-ferrous metals. The gains were largely in line with recent trends, with demand from countries around the world boosted by projects involving the construction of data centers and other developments related to artificial intelligence.
Meanwhile, imports are also expected to continue showing strong growth in July, with data from the Ministry of Finance indicating that imports through around mid-July rose 22.5 percent from a year earlier. Taking this result into account, imports are expected to rise 26.5 percent in July after increasing 25.4 percent a month earlier.
Imports are seen rising as Japan has to secure more expensive crude oil from regions outside the Middle East. In June, besides crude oil, the increase was also driven by higher values of computer chips and non-ferrous metals.
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.