Japan’s trade deficit widened significantly to JPY 1,105.6 billion in August 2026 from JPY 294.1 billion a year earlier, slightly below market expectations for a JPY 1,052.6 billion shortfall. It marked the fourth consecutive month of deficit and the largest since January, as imports grew faster than exports. Imports surged 28.0% year-on-year to JPY 11,153.9 billion, following a 27.9% rise in July and exceeding forecasts of 26.3%, marking the strongest growth since November 2022. The increase reflected solid domestic demand, partly supported by the government’s late-2025 stimulus. Crude oil imports jumped 58.7% as Japan diversified energy purchases away from the Strait of Hormuz amid ongoing tensions. Exports rose 19.3% to JPY 10,048.4 billion, topping expectations for 18.2%. Outbound shipments increased for a 12th straight month, supported by a weaker yen and robust demand for AI-related chips, despite supply-chain risks stemming from the Middle East conflict.