Media365
Japan’s exports expanded for a ninth consecutive month in May, underscoring the resilience of the country’s trade sector despite supply chain disruptions and higher energy costs stemming from the recent conflict in West Asia.
Data released by Japan’s Ministry of Finance on Wednesday showed exports by value climbed 17 per cent year-on-year in May, exceeding a median market forecast of 16.2 per cent growth. The increase also marked an acceleration from April’s 14.8 per cent rise.
The stronger-than-expected performance was driven largely by sustained global demand for semiconductor-related products, including chip-making equipment and electronic components, as investments in artificial intelligence infrastructure and data centres continued to support technology spending worldwide.
Exports to the United States rose 12.5 per cent from a year earlier in May, while shipments to China increased 17.9 per cent, highlighting robust demand from Japan’s two largest trading partners.
Semiconductor demand supports trade resilience
The data suggests Japan’s export sector has remained resilient even as geopolitical tensions in West Asia disrupted shipping routes, strained supply chains and pushed up energy prices. The conflict between the United States, Israel and Iran had raised concerns over the security of crude oil supplies passing through the Strait of Hormuz, a key global energy chokepoint.
Exports of chip-making equipment and electronic components continued to benefit from strong global demand linked to artificial intelligence, advanced computing and data centre investments, helping cushion the impact of broader trade disruptions.
Imports rise despite sharp fall in crude oil purchases
On the import side, Japan recorded a 12.5 per cent increase in inbound shipments in May compared with a year earlier. While the figure was slightly below economists’ expectations for a 12.8 per cent rise, imports remained elevated despite a sharp decline in crude oil purchases.
Crude oil import volumes fell 28.5 per cent in value terms during the month as the closure of the Strait of Hormuz drove up prices of crude and petroleum-related products.
As a result, Japan posted a trade deficit of 378.7 billion yen (about $2.36 billion) in May. The shortfall was smaller than the market forecast of a 564.6 billion yen deficit, reflecting the strength of export growth during the month.
Energy dependence remains a challenge
Japan remains heavily dependent on imported energy, making its economy particularly vulnerable to disruptions in global oil markets. The government has sought to diversify crude procurement by increasing purchases from suppliers outside West Asia, including the United States, but those efforts have only partially mitigated the impact of supply disruptions and higher prices.
The trade figures come as tensions in the region show signs of easing. US and Iranian officials said on Sunday they had agreed on a framework for a deal aimed at ending the conflict, lifting the US blockade of Iran and reopening the Strait of Hormuz.
