Japan Exports Rise 16.7 Percent as Chip Demand Lifts Shipments

Japan's exports rose 16.7 percent from a year earlier in September, government data showed on Wednesday, Oct. 21. It was a 13th straight month of gains. The rise followed a 19.3 percent increase in August and fell short of the 20.1 percent median forecast in a Reuters poll of economists, Ministry of Finance data showed.

Imports rose 18.9 percent from a year earlier, close to the 19.6 percent forecast. The trade balance stood at a deficit of 536.6 billion yen, about 3.39 billion dollars. That was narrower than the 1.1 trillion yen deficit in August, but wider than the 181 billion yen deficit economists had forecast, and it marked a fifth straight monthly deficit.

Chips did the heavy lifting

Strong global investment in artificial intelligence kept demand for Japanese chips and chipmaking gear high. Semiconductor exports rose 49.4 percent by value from a year earlier. Exports of semiconductor related machinery rose 43.9 percent, and power generation machinery shipments rose 22.6 percent.

By destination, exports to the United States rose 22.9 percent in September from a year earlier. Shipments to China increased 8.6 percent. Exports have supported Japan's economy through the first half of 2026, and September kept that support in place even as the pace cooled from July's near four year high.

Energy shaped the import side

Import growth slowed from 28 percent in August. Crude oil arrivals fell after tankers rerouted away from the Bab el-Mandeb Strait when Yemen's Houthi militia declared a naval blockade against Saudi Arabia, which delayed deliveries into Japan. Higher energy prices earlier in the autumn had pushed the import bill up and nearly doubled the trade deficit from forecast levels.

The government has said crude oil procurement for October should recover to around 100 percent of the level seen in the same month a year earlier, as tankers travelling via the Suez Canal arrive.

Why it matters

The numbers land just before the Bank of Japan's policy meeting later this month. The bank will release fresh quarterly growth and inflation forecasts, and markets will read them for clues on the timing of the next interest rate increase. A softer export pace and a sticky deficit give the bank a mixed picture: external demand still holds, but energy costs keep pressure on prices and on household budgets.

The yen traded near 158.26 per dollar in the data release reference rate. For exporters, that level still helps earnings. For importers and drivers, it keeps fuel and food costs high.

What happens next

October trade data will show whether the crude recovery arrived as promised and whether chip demand can keep carrying the export column. The Bank of Japan meeting comes first, and its forecasts will move the yen before the next trade print does.