Japan’s Export Growth Accelerates in July, But Import Surge Leads to Trade Deficit

• Japan’s export growth accelerated significantly in July, rising 10.3% year-on-year, up from 5.4% in June. This growth was driven primarily by the weaker yen, which boosted the competitiveness of Japanese products abroad.
• Despite the strong growth, the export figures fell short of analysts’ expectations, who had anticipated a 11.4% increase.
• Imports surged by 16.6%, exceeding expectations, as rising wages fueled domestic demand. Analysts had forecasted a 14.9% increase in imports, highlighting the stronger-than-expected performance.
• The sharp rise in imports compared to exports resulted in a significant trade deficit for Japan. After recording a trade surplus of 223.98 billion yen (1.38 billion euros) in June, Japan registered a deficit of 621.8 billion yen in July.
• Japan’s export performance varied by region: exports to the European Union declined by 5.3%, while exports to the United States and China increased by 7.3% and 7.2%, respectively.

Tokyo, August 21 (FFN) – Japan’s export growth surged in July, with a year-on-year increase of 10.3%, significantly higher than the 5.4% growth recorded in June. This robust performance was largely due to the depreciation of the yen, which enhanced the appeal of Japanese goods on international markets. However, the export growth fell short of market expectations, as analysts had predicted a 11.4% rise.

In contrast, Japan’s imports grew even more rapidly, climbing 16.6% in July. This increase was fueled by rising domestic wages, which spurred higher consumer demand. The import growth exceeded analyst expectations, who had projected a 14.9% rise. In June, imports had risen by just 3.2%.

The disparity between the growth rates of imports and exports led to a significant deterioration in Japan’s trade balance. The country shifted from a trade surplus of 223.98 billion yen (1.38 billion euros) in June to a trade deficit of 621.8 billion yen in July, far exceeding the expected deficit of 330.7 billion yen.

Regionally, Japan’s export performance showed mixed results. Exports to the European Union dropped by 5.3%, while exports to the United States and China saw increases of 7.3% and 7.2%, respectively.

Key Data on Japan’s Foreign Trade (July 2024)