AI boom powers Japan's exports as semiconductor shipments surge 49%

Japan’s July trade data showed a strong export rebound, with exports rising 23.2% year over year versus 19.9% expected, driven by a 49.1% surge in semiconductor equipment shipments tied to AI demand. Imports also beat forecasts, climbing 27.8%, largely because petroleum import values jumped 87.8% as the Iran war lifted oil prices. The trade deficit narrowed to 634.5 billion yen, slightly better than expected, though wider than June’s shortfall. The data supports the view that Japan’s growth is broadening and could modestly support the yen, while also reinforcing expectations that the Bank of Japan can continue a gradual normalization path. For markets, the key signal is continued strength in Japan’s tech and manufacturing supply chain, especially AI-related capital spending, even as energy costs remain a drag.