Japan is aiming to revitalize its semiconductor industry. The Japanese government has opened billions of dollars in subsidies to the domestic chip sector.
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Semiconductor shipments continued to drive Japan’s exports in July, exceeding expectations and recording the highest growth since October 2022.
Export growth accelerated for the fifth consecutive month to 23.2%. Economists polled by Reuters had expected 19.9%.
Semiconductor equipment shipments recorded a strong 49.1% increase, reflecting continued demand driven by the artificial intelligence boom.
By destination, exports to China, Japan’s largest trading partner, increased by 25.8%, and exports to the United States increased by 22%.
Despite the increase in export value, the increase was mainly due to the weaker yen and higher selling prices, and volume growth in July was only 5.2%.
benchmark Nikkei Stock Average Although it rose 0.64% after the data was released, circle Against the dollar, it traded 0.11% lower at 158.35.
“Japan’s manufacturing industry, like its neighbors, is riding the AI wave, with electronics exports accelerating further last month, helping the economy offset the impact of rising energy prices,” Frederick Neumann, chief Asia economist at HSBC, told CNBC.
He also said that the weak yen is contributing to improving the competitiveness of Japanese producers, even though it is raising import costs and holding back consumption.
Strong exports in the past few months have supported Japan’s GDP. On a year-on-year basis, economic growth was 0.7% in the second quarter, compared to 0.5% in the first three months of the year.
Although GDP was lower than expected on a sequential and annual basis, the sector was the largest contributor to economic growth, with exports helping to cushion the impact.
HSBC’s Neumann said that as long as the AI hardware boom continues, Japan’s exports should deliver strong growth and support the broader economy.
Imports to Japan rose 27.8% in July, the highest level since November 2022, and also exceeded analysts’ expectations for a 26.5% increase. Due to the impact of the Iran war, the country’s oil imports increased by 87.8% in value terms due to the rise in crude oil prices.
According to the International Energy Agency, Japan meets more than 87% of its energy needs with imports.
