Japan’s imports surged to a record high in June as a weak yen and elevated oil prices sharply increased the country’s import bill, revealing the difficult balancing act facing the Bank of Japan (BOJ) as it seeks to contain inflation without derailing a fragile economic recovery.

Government data released on Wednesday, which was first published by Reuters, showed imports climbed 25.4% from a year earlier to an all-time high of 11.3 trillion yen ($69.25 billion), exceeding economists’ forecast of a 21% increase and marking the fastest pace of growth since November 2022. The surge was driven largely by crude oil, with the depreciation of the yen magnifying the cost of energy imports for the world’s fourth-largest economy.

The figures amplify a growing concern for Japanese policymakers that the country’s currency weakness is becoming a major source of imported inflation. Unlike demand-driven inflation, which reflects stronger consumer spending and wage growth, imported inflation raises living costs by increasing the price of essential goods such as fuel, electricity and food, reducing households’ purchasing power.

That dynamic presents a challenge for the BOJ ahead of its policy meeting next week. The central bank is widely expected to keep its benchmark interest rate unchanged, but economists expect policymakers to maintain a hawkish bias, signaling they remain prepared to tighten policy further if inflation proves more persistent.

For years, Japan battled deflation and weak price growth, prompting the BOJ to maintain ultra-loose monetary policy while other major central banks aggressively raised interest rates. The resulting interest rate gap has weighed heavily on the yen, making imports significantly more expensive while boosting the overseas earnings of Japanese exporters.

The latest trade figures illustrate that imbalance.

Although crude oil import volumes fell 13.7% from a year earlier, the value of those imports jumped 59.3%, with the yen-denominated unit cost climbing to a record high. The sharp increase highlights that higher prices, rather than greater demand, are driving Japan’s swelling import bill.

“Japan’s diversification of oil procurement sources is progressing, with purchases from the United States and Russia surging, while declines in imports from the Middle East have moderated,” said Koki Akimoto, an economist at Daiwa Institute of Research.

The shift comes amid Japan’s broader effort to reduce its dependence on Middle Eastern oil as recurring geopolitical tensions threaten global energy supplies. However, the country remains heavily reliant on imported fossil fuels following the reduction of its nuclear power capacity after the 2011 Fukushima disaster, leaving it vulnerable to swings in global commodity prices and exchange rates.

Geopolitical developments continued to influence trade during the reporting period. Although high-level U.S.-Iran peace talks began in late June and crude prices subsequently eased, uncertainty surrounding the conflict disrupted shipping routes and energy markets for much of the month. Renewed hostilities between Iran and the United States in recent weeks have once again raised concerns about potential supply disruptions and higher energy costs.

“While hopes had been rising among major economies for easing inflation and a recovery in growth, prolonged instability could weigh on global economic activity and increase the risk of a broader slowdown,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

The BOJ has already acknowledged the inflationary implications of the conflict. Earlier this month, the central bank warned that higher energy prices resulting from the Iran war could encourage more companies to raise prices later this year, increasing the likelihood that inflation remains above its 2% target and strengthening the case for additional interest rate hikes.

However, policymakers also see important sources of resilience within Japan’s economy, particularly the global boom in artificial intelligence investment.

That optimism was reflected in June’s export performance.

Exports rose 19.3% from a year earlier, beating economists’ expectations for an 18.6% increase and accelerating from May’s 16.8% growth. The increase was supported by the weaker yen, which enhanced the price competitiveness of Japanese goods abroad, and by robust demand for AI-related infrastructure, including semiconductors, electronic components, chipmaking equipment and data center hardware.

Japan’s technology and industrial sectors are increasingly benefiting from the multiyear AI investment cycle led by major U.S. technology companies, which continue to spend heavily on advanced chips, servers and cloud infrastructure. The sustained expansion of AI-related capital expenditure has become a significant driver of Japanese exports, helping offset weakness in other parts of the global economy.

Exports to the United States rose 13% in June, led by strong automobile shipments. Persistently high gasoline prices encouraged American consumers to purchase more fuel-efficient hybrid vehicles, benefiting Japanese automakers that dominate the hybrid market. The weak yen also improved the international competitiveness of Japanese vehicle exports, supporting manufacturers’ overseas earnings.

Still, the strength in exports was insufficient to offset soaring import costs.

Japan recorded a trade deficit of 406.9 billion yen ($2.49 billion) in June, far wider than the market expectation of a 120 billion yen deficit. The larger-than-expected shortfall illustrates how rapidly rising energy costs continue to outweigh gains from exports, limiting the positive impact of stronger overseas demand.

The widening deficit also highlights a broader structural issue for Japan. While a weaker yen generally boosts exporters by increasing the value of overseas revenues when converted into domestic currency, it simultaneously raises production costs for companies that rely on imported energy and raw materials. Smaller businesses, which have less pricing power than large manufacturers, often struggle to absorb those higher costs, while households face rising prices for electricity, transportation and food.

According to Daiwa’s Akimoto, exchange rate dynamics remain the dominant factor influencing Japan’s trade outlook.

“The yen’s weakness is primarily being driven by Japan’s low interest rates relative to other major central banks and concerns about fiscal policy, rather than the current account balance,” he said.

That suggests the yen may remain under pressure unless the BOJ narrows the interest rate gap with the U.S. Federal Reserve and other major central banks or global investors become more confident about Japan’s fiscal outlook.

Looking ahead, economists expect markets to closely scrutinize next week’s BOJ policy statement for any changes in language regarding inflation risks, wage growth and the pace of future rate increases. While policymakers are unlikely to tighten policy immediately, persistently high import costs, elevated energy prices and continued yen weakness could strengthen the case for further normalization later this year if inflation remains broad-based.

Samsung Electronics is in talks to invest as much as €1 billion (about $1.14 billion) in French artificial intelligence startup Mistral AI, joining a new funding round that could value the company at around €20 billion ($22.8 billion), according to a report by the Financial Times.

Citing people familiar with the matter, the newspaper said the South Korean technology giant is considering an investment worth roughly €1 billion, while Swedish private equity firm EQT, through its Scaleup Europe Fund, is also in discussions to participate in the fundraising.

If completed, the deal would rank among Samsung’s largest investments in artificial intelligence and reinforce the company’s ambitions to deepen its presence across the rapidly expanding AI ecosystem, extending beyond semiconductors into foundation models, enterprise AI software and cloud infrastructure.

Neither Samsung nor Mistral immediately confirmed the report.

The reported investment comes as Samsung accelerates efforts to strengthen its AI portfolio amid intensifying competition from rivals including Nvidia, Microsoft, Alphabet, Amazon and Meta.

Earlier this year, Samsung said it would pursue investments and acquisitions where necessary to accelerate commercialization in emerging technologies, particularly robotics and artificial intelligence, while also expanding partnerships with technology companies. An investment in Mistral would complement Samsung’s broader AI plan, which spans memory chips, AI-enabled smartphones, consumer electronics, cloud infrastructure and next-generation computing platforms.

The move could also create opportunities for Samsung to integrate Mistral’s large language models into future Galaxy smartphones, AI-powered home appliances and enterprise solutions, while potentially strengthening demand for the company’s advanced memory chips that power AI systems.

The fundraising discussions come just days after Microsoft announced a multibillion-dollar agreement with Mistral to expand the startup’s AI computing infrastructure across Europe. The partnership will provide Mistral with significantly greater computing capacity while making its models more widely available through Microsoft’s cloud ecosystem, enabling enterprises and developers to deploy the French company’s AI technology more easily.

The twin developments show that Mistral is emerging as Europe’s leading AI startup and one of the few companies viewed as capable of challenging the dominance of American AI developers.

Founded in 2023 by former researchers from Google DeepMind and Meta, Mistral has rapidly become the flagship of Europe’s efforts to develop homegrown frontier AI models. The company has positioned itself as a European alternative to OpenAI, Anthropic and Google, emphasizing open-weight models, greater transparency and technological independence.

Its technology is already used by the French military and government agencies, reflecting Europe’s growing emphasis on strategic digital autonomy.

The reported Samsung investment supports broader efforts by Europe to stand alone in AI development. European policymakers have increasingly sought to reduce dependence on U.S.-based AI providers amid concerns over data sovereignty, national security and long-term control of critical digital infrastructure.

Those concerns intensified after the United States last month suspended foreign access to two advanced AI models developed by Anthropic, highlighting the risks associated with relying on overseas AI platforms for critical government and commercial applications.

The decision bolstered calls across Europe to build independent AI capabilities that are less vulnerable to export restrictions or shifts in U.S. policy.

Although Mistral remains significantly smaller than leading American AI companies, its rapid rise has attracted substantial investor interest. But its projected €20 billion valuation remains well below the valuations of major U.S. AI firms such as Anthropic, OpenAI and xAI, which have attracted funding at valuations running into hundreds of billions of dollars. Nevertheless, the fundraising would further cement Mistral’s position as Europe’s most valuable AI startup and one of the continent’s most strategically important technology companies.

For Samsung, backing Mistral would also strengthen relationships with one of Europe’s fastest-growing AI developers at a time when demand for AI infrastructure continues to surge. As one of the world’s largest producers of high-bandwidth memory (HBM), DRAM and advanced semiconductor components, Samsung stands to benefit from the rapid expansion of AI data centers and model training, regardless of whether demand comes from U.S. or European AI developers.

British artificial intelligence startup Synthesia is expanding beyond AI-generated corporate videos with the launch of an interactive training platform designed to help enterprises measure whether employees actually improve their skills, marking a shift toward performance management.

The company on Wednesday unveiled Roleplay Sessions, an AI-powered training product that allows employees to simulate real-world workplace conversations with AI avatars that can respond dynamically, challenge users, and assess their performance against predefined evaluation criteria.

The launch represents Synthesia’s first product under a broader Sessions platform that the company plans to expand into additional enterprise applications, including job interviews and candidate screening, according to TechCrunch.

The move follows a broader shift in the enterprise AI market, where customers are now demanding measurable returns on their AI investments rather than simply adopting generative AI tools for productivity gains.

Synthesia built its business by enabling companies to produce training videos using AI-generated avatars, dramatically reducing the cost and time required to create corporate learning materials.

However, Chief Executive and co-founder Victor Riparbelli said the company believes that generating training content alone is insufficient if businesses cannot determine whether employees have actually learned new skills.

“Video performs way better than text or sending out a document,” Riparbelli told TechCrunch. “But for most things, we learn the best by actually practicing something rather than just reading it.”

The company cited research suggesting that while instructional videos improve knowledge transfer, behavioral change is more effectively achieved through repeated practice combined with immediate feedback.

Roleplay Sessions is designed around that principle by allowing employees to engage in simulated conversations covering scenarios such as sales presentations, customer complaints, performance reviews, and difficult workplace discussions. Rather than simply watching instructional content, users receive real-time responses from AI avatars before being evaluated against company-defined rubrics.

The new offering also represents a repositioning for Synthesia as generative AI technologies become increasingly commoditized. While the company continues to rely on its proprietary avatar and voice-generation technologies, the reasoning capabilities underpinning the conversations are powered by OpenAI’s large language models.

By layering enterprise-specific assessment tools, analytics, and performance scoring on top of foundation models, Synthesia is attempting to differentiate itself from companies offering generic AI assistants.

“From a managerial executive layer, we’re seeing huge interest in mapping out the talent in their company in a way that’s been really difficult to do before,” Riparbelli said.

“If you have your entire sales team practice with an AI role player, you can get very granular data on how your sales force is doing overall.”

Vendors in enterprise software are increasingly seeking to build proprietary workflows and datasets around third-party AI models instead of competing solely on model capabilities.

Synthesia said several large organizations have already begun deploying the platform commercially. According to the company, early customers include one of Europe’s three largest publicly listed companies by market capitalization, one of the five largest Fortune 100 companies and one of the world’s largest recruitment firms.

The most common applications involve sales enablement and leadership development, where employees can repeatedly practice customer interactions, negotiations and management conversations before engaging with clients or colleagues. Organizations can either build their own roleplay scenarios using existing company documentation and training materials or work with Synthesia’s consulting team to develop customized training programs tailored to their business needs.

The launch comes as businesses increasingly scrutinize enterprise AI spending following an initial wave of enthusiasm surrounding generative AI. After two years of rapid experimentation with AI assistants and content-generation tools, many corporate technology leaders are shifting their attention toward measurable business outcomes, productivity gains and workforce performance.

This evolution is reshaping enterprise AI priorities. Rather than evaluating AI based on its ability to generate text, images or videos, organizations are now seeking platforms that can demonstrate improvements in employee productivity, sales effectiveness and operational performance.

For AI vendors, this creates an opportunity to move beyond offering standalone generative AI features and instead become integrated into broader enterprise workflows.

Although Roleplay Sessions is initially targeted at large enterprise customers, Synthesia plans to expand the platform to smaller businesses, individual professionals and educational institutions over the coming months as AI inference costs continue to decline. The company expects the broader Sessions platform to evolve beyond employee training into areas such as recruitment, candidate assessment and other interactive business workflows that combine conversational AI with structured performance evaluation.

Global stocks edged higher on Wednesday as surging oil prices boosted energy shares, although U.S. equity futures retreated ahead of closely watched earnings from Alphabet and Tesla that could test investor confidence in the artificial intelligence-driven market rally.

Crude prices climbed to six-week highs after renewed security concerns in the Red Sea disrupted shipping, while investors also monitored developments in Japan after reports suggested the Bank of Japan was becoming more concerned about persistent inflation pressures.

The combination of higher energy prices, geopolitical risks and a busy earnings calendar left markets cautious despite gains across European equities.

The MSCI All-World Index rose 0.1%, while Europe’s STOXX 600 advanced 0.6%, led by oil and gas companies that benefited from the jump in crude prices.

U.S. futures, however, pointed to a weaker open, with Nasdaq futures falling 0.6% and S&P 500 futures slipping 0.2%, reflecting investor caution ahead of earnings from two of the market’s most influential technology companies.

Brent crude climbed 3.5% to $94.22 per barrel, its highest level since early June, after two oil tankers carrying Saudi crude to Asia reversed course in the Red Sea following renewed threats from Yemen’s Iran-aligned Houthi militants.

The development renewed concerns about potential disruptions to one of the world’s most important energy shipping routes, tempering hopes that geopolitical tensions in the Middle East were beginning to ease.

Higher oil prices have become a growing concern for investors because they threaten to reignite inflation at a time when major central banks are attempting to balance slowing economic growth with still-elevated price pressures. The rally in crude also lifted European energy stocks, making the sector one of the strongest performers in regional markets.

Big Tech Earnings Face Heightened Scrutiny

Attention is now shifting to quarterly earnings from Alphabet and Tesla, which are expected after the U.S. market closes. The results are being closely watched because they could provide fresh insight into whether the massive wave of AI-related capital expenditure is translating into sustainable earnings growth.

Alphabet is under pressure following delays to one of its flagship AI model releases, raising questions about its competitive position against rivals including OpenAI, Anthropic and rapidly advancing Chinese AI developers.

Tesla, meanwhile, is widely expected to report its first quarterly cash burn in more than two years, highlighting investor concerns over slowing electric vehicle demand, heavy spending on artificial intelligence and autonomous driving technologies, and the company’s expanding robotics ambitions.

“Even the slightest doubt about the monetization of artificial intelligence or the return on infrastructure spending could call into question the main driver of the market rally over the past nearly two years,” said John Plassard, head of investment strategy at Cité Gestion.

His comments amplify growing investor concerns that after driving equity markets to record highs, AI-related valuations now require stronger earnings growth to justify continued optimism.

Markets also digested a new trade policy announcement from U.S. President Donald Trump. The president said generic drugs imported into the United States will face no tariffs for two years beginning August 1, after which duties will rise to 100% for one year before increasing further to 200%.

The phased approach appears designed to give pharmaceutical companies time to shift manufacturing capacity while encouraging domestic production.

Earlier this week, Trump also imposed a 50% tariff on selected Canadian goods, adding another layer of uncertainty to the global trade environment.

Yen Steadies As BOJ Inflation Concerns Grow

Currency markets focused on Japan after Reuters reported that Bank of Japan officials are increasingly alert to upside inflation risks that could require interest rate increases sooner than financial markets currently expect.

The yen strengthened modestly to 162.98 per dollar after falling to its weakest level in roughly four decades on Tuesday.

Japanese Finance Minister Satsuki Katayama reiterated that authorities remain prepared to take “decisive action” in foreign exchange markets if necessary, although she declined to comment on specific exchange rate levels.

The weak yen, combined with rising energy prices, pushed Japan’s imports to a record high in June. At the same time, exports exceeded expectations, supported by robust overseas demand for AI-related infrastructure and data-center equipment, alongside improved competitiveness from the depreciated currency.

However, the resurgence in oil prices is adding another challenge for policymakers preparing for upcoming monetary policy meetings. The European Central Bank is scheduled to announce its latest policy decision on Thursday, while the U.S. Federal Reserve meets next week.

Both central banks are widely expected to leave interest rates unchanged this month, but derivatives markets continue to price in at least one additional 25-basis-point rate increase in both the United States and the euro zone before year-end, according to LSEG data.

The prospect of higher borrowing costs has kept bond markets relatively stable. The yield on the benchmark 10-year U.S. Treasury note held at 4.63%, near a two-month high reached in the previous session.

Meanwhile, investors also sought traditional safe-haven assets. Gold rose 1.1% to a two-week high of about $4,120 per ounce, benefiting from heightened geopolitical uncertainty and expectations that inflationary pressures could remain elevated if energy prices continue to climb.

The coming days are likely to be pivotal for global markets, with investors weighing corporate earnings, central bank signals and geopolitical developments to assess whether the AI-driven equity rally can withstand a more challenging macroeconomic backdrop.