In July, Japan's exports grew by 23.2%, marking the fastest growth since October 2022 and surpassing economists' forecasts of 19.9%. This growth was largely fueled by a remarkable 49.1% increase in semiconductor equipment shipments, driven by heightened demand linked to the artificial intelligence sector.
Notably, exports to China, Japan's largest trading partner, rose by 25.8%, while shipments to the U.S. increased by 22%. Despite the strong export figures, the gains were significantly influenced by a weak yen and higher selling prices, with actual shipment volumes only increasing by 5.2%.
Following the release of this data, the Nikkei 225 index rose by 0.64%, and the yen weakened slightly against the dollar, trading at 158.35. The robust export performance has been crucial for Japan's GDP, which grew by 0.7% year-on-year in the second quarter, although it fell short of expectations on a quarter-on-quarter basis.
Additionally, Japan's imports surged by 27.8% in July, driven by a substantial increase in petroleum imports due to rising oil prices amid geopolitical tensions, highlighting the country's reliance on imports for over 87% of its energy needs