Japan’s trade deficit widened significantly to JPY 536.6 billion in September 2026 from JPY 277.7 billion in the same month a year earlier, exceeding market expectations of a JPY 181.0 billion shortfall and marking a fifth consecutive monthly deficit. The deterioration came as imports outpaced export growth. Imports rose 18.9% year-on-year to JPY 11,508.8 billion, easing from August’s 28.0% surge and below forecasts of 19.6%, marking the slowest growth since May. Still, crude oil imports jumped 51.1%, partly reflecting Japan’s efforts to diversify energy procurement amid tensions surrounding the Strait of Hormuz. Meanwhile, exports rose 16.7% to JPY 10,972.2 billion, less than estimates of 20.1% and pointing to the slowest growth in five months, although shipments extended their expansion streak to 13 months. Resilient demand for AI-related semiconductors continued to support exports, while supply-chain disruptions linked to the Middle East conflict posed headwinds.