Japan’s May trade data showed a ¥378.6 billion ($1.6B) deficit , the first in four months, as Middle East tensions disrupted energy supply. Still, overall exports rose 17% YoY – the fastest since November 2022 – driven by semiconductor exports up 61.2% and automobile shipments up 16.4% . Both gains were fueled by global AI demand and solid auto sales.
Exports to China (+17.9%) and the U.S. (+12.5%) grew strongly, while exports to the Middle East fell 32%.
Imports rose 12.5% (slightly below the 12.8% forecast), with oil imports down 28.5% due to supply route adjustments. The deficit came in well below the ¥564.6B analyst consensus.
On monetary policy, the Bank of Japan raised rates by 25bps to 1% , a 30‑year high, to counter inflation and support the yen – a move that aids exports but raises import costs and living expenses.
ICgoodFind: Japan’s semiconductor export boom is real, but energy and currency cross‑currents will shape its trade trajectory ahead.
