TOKYO (AP) — Japan’s trade deficit totaled 1.1 trillion yen ($7 billion) last month as surging oil prices due to the conflicts in the Middle East sent the cost of imports soaring.

It was the fourth straight month of red ink, according to the Finance Ministry’s preliminary data Wednesday.

Resource-poor Japanimports virtually all its oil. Previously that came mostly through the Strait of Hormuz, where traffic has been curtailed due the stalemated Iran war.

Japan’s imports in August rose 28% from the same month a year ago to 11.15 trillion yen ($71.9 billion), as the price of oil soared.

Japan’s exports rose 19.3% to 10 trillion yen ($64.5 billion), mainly in computer chips and autos.

By nation or region, Japan’s exports to the U.S. grew 24.9% from the previous year, while imports from the U.S. rose 55.2%.

Japan’s exports to the Middle East declined 5.2%, while imports from that region fell 4.2%. Japan’s exports to Europe edged up 11%, while imports gained 20.4%.

The price of Brent crude has soared over the last year, from the upper $60 levels per barrel to more than $100. That reached as high as $118 a barrel in April.

The focus is now on what the U.S. and Japan might do on interest rates. 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.

The yen has fallen recently against the U.S. dollar, although it briefly gained due to joint intervention by the U.S. and Japan.

The dollar is trading recently at about 155 yen. Some analysts are expecting it to fall to about or below 150 yen later this year.

The Bank of Japan meets later this week to decide on its benchmark interest rate. Markets are already figuring in a raise to 1.25% from the current 1%.

A stronger yen would help at a time when the nation must import oil and other products, including food and raw materials.

It would hurt giant exporters like Toyota Motor Corp., by reducing the value of exports when converted into yen.

Japanese Prime Minister Sanae Takaichi is promising more government spending, as well as a reduction of the consumption tax on food.

The U.S. Federal Reserve is widely expected to lift its short-term interest rate Wednesday for the first time in three years to fight stubbornly high inflation.

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Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama

Yuri Kageyama, The Associated Press