Japan's Trade Deficit Widens Despite Record Exports and Imports

Japan's imports and exports both set new records in July, but the country is still struggling with a trade deficit. The Finance Ministry reported that the trade deficit totaled 634.5 billion yen ($4 billion) last month, marking the third straight month of red ink.

The surge in imports was driven by soaring energy costs, which were exacerbated by the war in Iran and the closure of the Strait of Hormuz. Japan imports almost all its oil from the Middle East, and the disruption has sent crude oil prices skyrocketing.

Despite the trade deficit, Japan's exports rose 23.2% to 11.51 trillion yen ($73 billion) in July, as auto exports to the U.S. and other nations remained strong. Shipments of semiconductors and other electronic devices were also healthy.