Japan Imports Soar on Oil Price Surge, Exports Keep Rolling

Japan's imports surged by 28% in August from the same period last year, marking the largest increase since November 2022. The Ministry of Finance data showed that higher oil prices led to a significant boost in energy imports, despite the yen's recent spike after a joint intervention with the United States.

The trade figures also revealed that exports rose by 19.3% year-on-year in August, exceeding economists' median forecast for an 18.2% increase. Strong chip-related shipments and higher non-ferrous metal prices contributed to this growth.

Crude oil import volumes increased by 3.6%, while the total value jumped a staggering 58.7%. This rise in energy costs is expected to continue, potentially leading to a further deterioration in Japan's terms of trade.

Koki Akimoto, an economist at the Daiwa Institute of Research, warned that 'oil import costs could increase further from September onward' due to the roughly two-month lag before higher crude prices are reflected in imports arriving at Japanese ports.