Japan's exports rose 16.5% in September from a year earlier to 10.95 trillion yen, according to revised Ministry of Finance data released Oct. 29, with shipments of semiconductors and electronic parts to Southeast Asia more than doubling. Imports grew faster, up 18.9% to 11.51 trillion yen, leaving a trade deficit of 556.5 billion yen.

The detailed release matters for investors across Asia because it shows where Japan's chip boom is landing. Exports to Asia, which take more than half of Japan's goods, rose 17.3%. Shipments to ASEAN jumped 25%, and to Taiwan and South Korea by 37.7% and 35.5%. China lagged at 8.5%, held back by a collapse in car sales.

The revised figures are slightly weaker than the preliminary count published Oct. 21, which showed exports up 16.7% and a deficit of 536.6 billion yen. Reuters reported then that economists had expected export growth of 20.1% and a deficit of only 181 billion yen. September was the 13th straight month of export growth, the news agency said.

Chips to ASEAN, Taiwan and Korea drive Japan's exports

Electronic parts did most of the work. Japan's worldwide exports of semiconductors and related parts rose 49.4% to 933.6 billion yen, and integrated circuits alone climbed 55.5%. Chipmaking equipment exports gained 43.9% to 553.3 billion yen. Together the two categories added more than 5 percentage points to headline growth, the customs tables show.

Asia bought almost all of it. Of the 933.6 billion yen in chip and parts exports, 875.9 billion yen went to Asian buyers. Sales to ASEAN rose 125.1%, and integrated circuit shipments there grew 160.6%. Exports to Singapore, a regional hub for chip packaging and distribution, rose 53.2% to 444.5 billion yen, while Malaysia took 29.4% more and Thailand 22.5% more.

Reuters reported that investment by South Korean chipmakers had lifted demand for Japanese chipmaking tools. Koki Akimoto, an economist at Daiwa Institute of Research, told the agency that AI demand should keep supporting exports. He cited Middle East conflict and high energy prices as downside risks and a slowdown in U.S. AI investment as a tail risk.

The pattern fits what other Asian exporters have reported. China's own data showed exports jumping 36% in September on AI-related demand.

Cars split between the U.S. and China

Japan's exports to the U.S. rose 22.9% to 1.96 trillion yen. Cars led: the value of passenger vehicles shipped to the U.S. rose 30.5% to 464.4 billion yen on a 6.1% rise in units, suggesting higher prices or a richer model mix. Chipmaking machinery to the U.S. jumped 93.1%, and pharmaceuticals rose 157.7%.

China went the other way. Car exports there fell 60% to 37.2 billion yen, and auto parts dropped 48.2%. Transport equipment as a whole shrank 55.5% and knocked 4.4 percentage points off growth in exports to China. Chipmaking tools to China rose only 14.3%, well below the 43.9% gain worldwide. Japan ran a 1.03 trillion yen deficit with China in the month, wider by about a third than a year earlier.

Worldwide, car exports rose 16.4% by value while units were flat, up 0.1%.

Oil bill keeps Japan in deficit

The import side explains the shortfall. Crude oil imports rose 51.1% by value to 1.11 trillion yen, even though volumes grew just 3.1%, and LNG imports rose 39.2% on lower volumes. Mineral fuels as a group added 6.9 points to import growth. Imports of chips and computers also surged, rising 51.4% and 42% respectively, as Japanese companies bought components and servers.

Reuters reported that crude arrivals had slowed after tankers diverted away from the Bab el-Mandeb Strait, and that the government expects crude procurement to recover to about year-earlier levels in October.

For the first half of Japan's fiscal year, April to September, exports rose 18.3% to 63.44 trillion yen and imports 20.5% to 66.29 trillion yen. The resulting deficit of 2.85 trillion yen is roughly 60% larger than the 1.76 trillion yen gap for the whole of fiscal 2025. The July to September quarter alone ran a 2.32 trillion yen deficit.

The weak trade balance comes as the Bank of Japan weighs further tightening. The central bank held its policy rate at 1.25% at its Oct. 30 meeting. The October customs figures, the first to show whether oil deliveries have normalized, are the next data point for the yen and for exporters' earnings.