FX.co ★ Japan Trade Gap Widens Sharply

Japan’s trade deficit widened sharply to JPY 536.6 billion in September 2026, up from JPY 277.7 billion a year earlier, surpassing market expectations of a JPY 181.0 billion shortfall and marking the fifth consecutive monthly deficit. The deterioration reflected import growth outpacing that of exports. Imports climbed 18.9% year-on-year to JPY 11,508.8 billion, slowing from August’s 28.0% surge and coming in below the forecast 19.6%, the weakest increase since May. Nevertheless, crude oil imports soared 51.1%, partly due to Japan’s efforts to diversify energy sources amid heightened tensions around the Strait of Hormuz. Exports rose 16.7% to JPY 10,972.2 billion, undershooting estimates of 20.1% and signaling the slowest growth in five months, though shipments still extended their expansion streak to 13 months. Robust demand for AI-related semiconductors continued to underpin exports, while supply-chain disruptions tied to the Middle East conflict acted as a drag.