Japan’s Exports Rise 16.7% in September on AI Chip Demand

Japan’s exports climbed 16.7% year on year in September, extending their winning streak to a 13th straight month as global spending on artificial intelligence kept demand (ai chip demand) for Japanese chipmaking equipment strong, though the gain fell well short of market expectations, Reuters reported citing Ministry of Finance data released on Wednesday.

Economists polled by Reuters had pencilled in a 20.1% rise, and the September figure marked a slowdown from the 19.3% growth recorded in August. Imports grew 18.9%, below the 19.6% median forecast and down sharply from August’s 28% jump. As a result, Japan posted a trade deficit of 536.6 billion yen (about US$3.39 billion), wider than the 181 billion yen shortfall markets had expected but roughly half the deficit of around 1.1 trillion yen seen in August, according to Reuters and investingLive.

Shipments of AI Chip to the US

By destination, exports to the United States rose 22.9% from a year earlier, while shipments to China increased 8.6%. Reuters said semiconductors and related equipment remained a key driver, with capital spending by South Korean chipmakers lifting orders for Japanese chip tools. Vehicle exports also held up, particularly to Europe, where an economic recovery has supported demand.

Koki Akimoto of Daiwa Institute of Research told Reuters that “AI demand should continue to underpin Japan’s exports,” but cautioned that a drawn-out conflict in the Middle East could hurt global demand through persistently high energy prices. He added that a slowdown in US AI investment was a tail risk, as it could weaken chip-related orders from other Asian economies that supply American buyers.

Oil disruption slows imports

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The sharp deceleration in imports was largely tied to lower crude oil arrivals. Tankers bound for Japan were rerouted away from the Bab el-Mandeb Strait after Yemen’s Iran-aligned Houthi movement declared a naval blockade against Saudi Arabia, delaying deliveries, Reuters said. The government has indicated that crude procurement should recover in October to roughly the level of a year earlier as tankers travelling through the Suez Canal arrive.

investingLive described the figures as broadly supportive for the yen and for the Bank of Japan’s case for further tightening, noting that external demand continues to underpin the economy despite the export miss. The dollar was quoted at about 158.26 yen at the time of the release.

What’s next

Attention now turns to the Bank of Japan’s policy meeting, which concludes on 30 October. The central bank will publish fresh quarterly growth and inflation forecasts that markets will scan for signals on the timing of its next interest rate increase. According to investingLive, most economists expect a rate hike in December, and the resilient trade data adds weight to that view.

For exporters, the outlook hinges on whether AI-related investment keeps its momentum and on how long the disruption to Middle East shipping routes and energy markets persists.

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