Japan’s exports jumped 19.3 percent in June from a year earlier, the fastest growth the country has posted since November 2022, as semiconductor equipment shipments and a persistently weak yen propelled shipments higher, Finance Ministry data showed. The gain outpaced the 18.6 percent rise economists surveyed by Reuters had penciled in, and marked a step up from the 16.8 percent recorded in May.

Imports climbed even faster, rising 25.4 percent year on year — a sign of firm domestic demand alongside the currency effects that inflate the cost of goods bought from abroad.

The export story is, once again, largely a chip story. Semiconductor shipments alone surged 53.8 percent in June, riding a wave of artificial intelligence investment that has lifted the shares of Japanese equipment makers including Tokyo Electron, Renesas Electronics and Advantest by anywhere from 50 to 93 percent since the start of the year. Regional demand did much of the work: shipments across Asia rose 22.7 percent, led by a striking 46.4 percent leap in goods sent to Taiwan. Exports to China, Japan’s single largest trading partner, gained 17.6 percent, while goods bound for the United States rose 13 percent.

There is, however, an important wrinkle beneath the headline number. While the value of exports soared, actual volumes barely moved, edging up just 0.2 percent. That gap underscores how much of the growth is being driven by pricing and the yen’s weakness rather than by a broad increase in the physical quantity of goods leaving Japanese ports. A softer currency makes Japanese products cheaper and more competitive abroad, but it simultaneously raises the cost of imported energy and materials, squeezing households and businesses at home.

The trade figures land against a backdrop of steady if unspectacular growth. Japan’s economy expanded 0.5 percent in the first quarter on a sequential basis, translating to a revised 1.8 percent annualized pace, with exports remaining one of its most reliable engines. The durability of that engine now hinges heavily on whether the global appetite for AI-related hardware holds up and whether the yen stays weak enough to keep Japanese goods attractive on price.

For Japanese manufacturers, the June data is a welcome signal that demand for their highest-value products — the specialized tools and components that feed the world’s chip factories — remains robust. The challenge for policymakers is that a currency weak enough to power exports is also weak enough to keep imported inflation stubbornly elevated, a balance the Bank of Japan continues to navigate as it weighs the path of interest rates.

JBizNews Desk | Tokyo

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