Chips lift Japan’s exports by 16.7%, but energy costs keep trade in deficit

Japan’s exports rose 16.7% in September from a year earlier, supported by semiconductors, chipmaking equipment and automobiles. The increase, announced on Wednesday by the Finance Ministry, extended the run of export growth to 13 months. It was not enough to balance trade, however: imports increased 18.9%, leaving a deficit of about 536.6 billion yen.

The figures explain an apparent contradiction in Japan’s economy. Its manufacturers are selling more abroad, but the country is also paying more for what it needs to buy. Strength in part of its industrial sector coexists with a high energy bill and the effect of a weaker yen on transactions priced in other currencies.

Export growth fell short of the 20.1% median forecast among economists surveyed by Reuters. The gap matters when assessing demand, although missing a forecast does not turn double-digit growth into a decline. Exports increased; they simply rose less than that survey had anticipated.

Higher export earnings do not mean an equal rise in shipments

Exports totaled 10.97 trillion yen, while imports reached 11.51 trillion. Values tell only part of the story, though: the export volume index rose just 1.9% from September 2025, while the import volume index fell 1.6%.

The contrast, also highlighted by Japanese financial publication Kabutrack, makes it necessary to distinguish quantities, prices and currencies. A larger bill can reflect more expensive goods or exchange rate movements as well as changes in the volume shipped. It does not automatically mean a comparable increase in output or in each manufacturer’s profits.

The exchange rate reference used by customs averaged 157.43 yen per dollar in September, compared with 147.61 a year earlier. That is the average used in the month’s statistics, not the market exchange rate when the report was released. For a Japanese importer, a weaker currency makes a dollar-priced purchase more expensive in yen, even if its price abroad is unchanged.

Seasonally adjusted figures offer another caution: exports fell 1.1% from August. That monthly decline can coexist with annual growth of 16.7% because the two figures use different comparisons. The data do not establish that export growth is accelerating consistently.

Technology manufacturers underpin the increase

The value of semiconductor and electronic component exports rose 49.4%. Exports of chipmaking equipment increased 43.9%, while automobile exports grew 15.1%. Those categories were among the main contributors to September’s result.

For Japanese suppliers, the difference between selling components and selling the machines used to make them matters. One business supplies products that other manufacturers put into their equipment; the other helps expand or modernize industrial capacity. Combining them into a single technology figure would obscure distinct businesses, even though both contributed to growth.

Export earnings also need to be distinguished from profitability. A manufacturer can report higher sales in yen while facing increased material or energy costs. Customs statistics describe trade in goods; profit margins, future orders and individual companies’ results will be set out in their financial reports.

Oil and gas weigh on the import bill

On the import side, the value of crude oil purchases rose 51.1%, and liquefied natural gas increased 39.2%. Energy costs help explain why imports grew faster than exports, even as the overall volume of goods imported declined.

Associated Press links the increase in costs to the war in the Middle East and the difficulties of supplying Japan with oil. The country imports virtually all the crude it uses. The impact extends beyond energy companies to transportation and businesses that use petroleum products.

The timeframe also changes how the deficit should be read. September improved on August, when the shortfall exceeded 1.11 trillion yen. But it deteriorated from September 2025, when the deficit was about 277.7 billion yen. This is the fifth consecutive month in deficit: a smaller monthly shortfall does not erase its increase from a year earlier.

For April through September as a whole, the deficit reached approximately 2.81 trillion yen, according to the half-year figures reported by AP. That period is the first half of Japan’s fiscal year and should not be confused with the monthly numbers released in the same report.

The figures are preliminary and may be revised under customs procedures. For now, they show an economy able to benefit from technology demand but exposed to the cost of securing fuel and other inputs. The next report will need to show whether export growth can overcome that pressure from imports and hold up in the volume of goods shipped, as well as in their yen value.