Japan posts record exports yet wider trade deficit for fourth month

Japan’s exports rose 19.3% year over year in August to a record ¥10.05 trillion, extending their growth streak to 12 months and beating economists’ expectations, with semiconductor-related shipments providing key support. Imports increased 28% to ¥11.15 trillion, driven largely by higher crude oil, electronic-component and computing-equipment costs, pushing the trade deficit to ¥1.106 trillion and marking a fourth consecutive monthly shortfall. The deficit was Japan’s largest since January and widened sharply from July as elevated oil prices and a weaker yen increased the cost of energy imports. The data present a policy challenge for the Bank of Japan: import-driven inflation may support further tightening, while weaker machinery orders suggest that business investment and economic momentum are losing strength.