The Finance Ministry's preliminary data for the April-September period showed Japan's exports totalled 63.5 trillion yen, while imports soared to 66.3 trillion yen. The widening trade gap reflects the heavy impact of the Iran conflict on resource-poor Japan, which imports virtually all of its oil and has historically relied on the Strait of Hormuz for shipments.
With the strait effectively blocked, Japan has had to pay more for oil from other routes. Brent crude, the international benchmark, has surged from around $70 a barrel in February to approximately $110 a barrel. Analysts cited in the report said prices are unlikely to ease soon.
For September alone, Japan posted a trade deficit of 536.6 billion yen, the fifth consecutive monthly shortfall and a sharp drop from August's 1.1 trillion yen deficit. September imports rose 18.9% year-on-year, while exports grew 16.7%.
The weakening yen has compounded the pressure. The U.S. dollar has been trading at around 150 yen, driving up the cost of imported goods including energy and food. The Bank of Japan, which kept borrowing costs near zero for years to support a fragile economy, has begun gradually raising interest rates. Last month, it lifted the benchmark rate to 1.25% from 1.0%, a 31-year high, partly to support the yen. The bank's monetary policy board meets again next week.
Prime Minister Sanae Takaichi's government has proposed cutting the consumption tax on food from 8% to 1% to help lower-income households cope with soaring prices. The bill is currently being debated in parliament. The government has said it is coordinating closely with the Bank of Japan on economic policy.