Japan’s trade deficit widened to JPY 634.5 billion in July, driven by surging imports outpacing export growth amid high energy costs.
The Japanese Yen (JPY) extended losses against the USD, trading near 158.50 in Asian hours, as Japan’s trade deficit ballooned to JPY 634.5 billion in July. The gap, though slightly below forecasts, marked the third straight month of deficits and the largest since January, fueled by record imports outpacing exports.
Exports rose 23.2% year-on-year to JPY 11,511.8 billion, exceeding expectations, while imports surged 27.8% to JPY 12,146.3 billion, the fastest growth in nearly two years. Elevated energy and import costs, alongside widening interest rate differentials, weighed on the currency.
Analysts suggest a sustained Yen recovery may require fresh FX intervention or softer oil prices, with USD/JPY stability hinging on external policy shifts.