Japan trade surges on weak yen, AI demand

Japan’s merchandise trade logged a strong performance in June 2026, with exports rising 19.3% year-on-year, the fastest pace since November 2022. Imports grew even more sharply, increasing 25.4% over the same period and surpassing market expectations. Both sides of the trade ledger expanded at rates not seen in more than three years.

Despite the large increase in export values, shipment volumes edged up just 0.2% from a year earlier. This divergence between value and volume points to the influence of higher prices and exchange-rate movements on the reported figures. The data underline how nominal trade growth can accelerate even when the underlying quantity of goods shipped changes only slightly.

The yen has depreciated to multi-decade lows and was reported as hovering around 163 against the U.S. dollar in June. This weakness makes Japanese exports more competitive in price terms abroad and inflates their yen value when overseas revenues are converted back. It also raises the cost in yen terms of imported goods, contributing to the strong increase in import values.

The impact of the currency move is visible in the gap between modest export volume growth and much stronger growth in export values. The same exchange-rate dynamic affects imports, where higher global prices combined with a weaker yen translated into a double-digit jump in the value of goods entering Japan.

Technology-related products were a key driver of June’s export performance. Semiconductor shipments surged 53.8% year-on-year, reflecting robust global demand for chipmaking and related equipment. This segment has been supported by ongoing investment in advanced computing and data infrastructure.

The Bank of Japan noted in its June monetary policy meeting that overseas economies are experiencing an upswing associated with demand linked to artificial intelligence. This environment has helped lift orders for semiconductor equipment and contributed to the strong showing of Japan’s tech-oriented exporters. The positive backdrop for technology demand has also supported domestic share prices in related sectors.

Exports to Asia increased 22.7% in June, underscoring the region’s importance for Japan’s trade. Shipments to Taiwan jumped 46.4%, while exports to China rose 17.6% year-on-year. Goods sold to the United States climbed 13%, showing broad-based gains across major destinations.

The latest trade figures coincided with gains in Japan’s equity market. The benchmark Nikkei 225 (NKY) index rose after the release of the June data, with investors focusing on the strength of technology exports and the benefit of the weak yen for corporate earnings. The combination of robust nominal trade growth, strong semiconductor shipments and supportive external demand has become a central feature of Japan’s current trade landscape.