The story

Japan recorded a trade deficit of 1.1 trillion yen, or $7 billion, in August, the fourth consecutive month of red ink, according to Finance Ministry data released Wednesday. Imports jumped 28% from a year earlier to 11.15 trillion yen ($71.9 billion), driven by higher crude oil prices amid conflicts in the Middle East. Brent crude has soared over the past year from the upper $60 per barrel range to more than $100, reaching as high as $118 a barrel in April.

Exports rose 19.3% year over year to 10 trillion yen ($64.5 billion), marking the 12th straight month of growth, mainly in computer chips and autos. Japan's exports to the U.S. grew 24.9% from the previous year, while imports from the U.S. rose 55.2%. Exports to China were up 20.6%. Traffic through the Strait of Hormuz, which previously supplied most of Japan's oil, has been curtailed due to the stalemated Iran war.

The Bank of Japan meets later this week to decide on interest rates. Markets are already figuring in a raise to 1.25% from the current 1%. The yen has fallen recently against the U.S. dollar and is trading at about 155 yen, although it briefly gained due to joint intervention by the U.S. and Japan. Treasury Secretary Scott Bessent made remarks widely seen as prodding Japan's central bank to raise interest rates, a move that would support the yen.