Japan's Trade Deficit Widens Amid Oil Route Rerouting

Japan's trade deficit widened to ¥634.5 billion in July as imports surged by 27.8%.

The country's Ministry of Finance reported that exports rose 23.2% year over year to ¥11.5 trillion, driven by electrical machinery and stronger shipments of cars and other transport equipment.

However, imports climbed faster, up 27.8% to ¥12.1 trillion, leaving a bigger gap than June's ¥409.9 billion deficit.

The widening trade gap is largely due to energy costs, as oil and many commodities are priced in US dollars, requiring domestic companies to convert more yen into dollars to settle those bills.