July exports rose at the fastest pace since October 2022, driven by a 49.1% jump in semiconductor equipment shipments amid AI-driven demand.
Japan’s exports climbed 23.2% year-on-year in July, exceeding economists’ forecasts of 19.9% and marking the fifth consecutive month of acceleration. The growth was led by a 49.1% surge in semiconductor equipment shipments, reflecting strong AI-related capital expenditure globally.
Imports rose 27.8% year-on-year, widening the trade deficit due to higher petroleum costs linked to geopolitical tensions. Despite this, the export strength suggests broadening economic momentum beyond domestic demand, supporting the yen and Bank of Japan policy normalization discussions.
The data reinforces expectations for gradual BOJ rate hikes, with GDP growth accelerating to 0.7% year-on-year in Q2. However, rising crude prices could offset some gains if the trend persists.