Japan's exports jump in June on weak yen, AI-linked demand

TOKYO, July 22 (Reuters) - Japan's exports rose for a tenth straight month in June, government data showed on Wednesday, driven by a weak yen and strong demand driven by AI-related data centres despite supply disruptions linked to the U.S.-Israeli war with Iran.

Total exports by value jumped 19.3% year-on-year in June, more than a median market forecast for an 18.6% increase and following a 16.8% rise in May.

Exports to the United States last month rose 13% from a year earlier, while those to China were up 17.6%, the data showed.

Imports surged 25.4% in June from a year earlier, compared with market forecasts for a 21% increase, as disruptions to shipping through the Strait of Hormuz sharply increased prices for crude oil and related products.

As a result, Japan ran a trade deficit of 406.9 billion yen ($2.49 billion) in June, compared with the forecast of a deficit of 120 billion yen.

Higher import bills, exacerbated by a weak yen, have been a headache for Japanese policymakers as they try to balance inflationary pressures against the need to support economic growth.

Even though high-level U.S.-Iran peace talks began in late June and oil prices fell, uncertainty over the conflict weighed on trade and logistics for much of the reporting period. Renewed hostilities between Iran and the U.S. in the past few weeks have further raised concerns for policymakers globally.

The Bank of Japan is poised to keep interest rates unchanged next week, while maintaining a tightening stance as a weak yen and rising energy prices intensify inflationary pressures and complicate the delicate trade-off between sustaining growth and preserving price stability.

($1 = 163.2000 yen)