The AI boom is transforming Japan's economy. Japan's exports surged +23% YoY in July, the largest annual increase since October 2022. This is up from June's +19% gain and marks the 5th consecutive monthly increase in growth. The surge was driven by electronic component and semiconductor exports, which soared +49% YoY, fueled by demand from AI and data center investment. At the same time, passenger car exports rose +21% YoY. Shipments to the US rose +22% YoY, while exports to China and Europe jumped +26% and +19%, respectively. The improvement also comes as the Yen weakened +11% YoY last month, to a 40-year low against the US Dollar, averaging 161.83, making Japanese exports more competitive globally. The global AI investment wave is driving a sharp increase in Japanese exports.