Japan recorded a trade deficit in May as technology product imports surged

The data released by Japan's Ministry of Finance on Wednesday show that the unadjusted trade balance turned to a deficit of 378.6 billion yen in May. Analysts had previously forecast a deficit of 547.6 billion yen. Imports grew by 12.5% year-on-year in May, while exports increased by 17%. The increase in imports was mainly driven by a 55% rise in imports of semiconductors and electronic products, as well as a 48% rise in imports of communication equipment. Both the volume and price of oil imports declined significantly, indicating that, as the Hormuz Strait was essentially closed due to the Iran war, Japan—a country that typically relies heavily on Middle Eastern oil—found other energy sources. According to the trade department, Japan is expected to ensure stable oil supplies until March 2028.