27 May 2025 (MLN): Japan lost his position as the world’s largest creditor -nation for the first time in 34 years, despite the placement of a record amount of overseas assets.
Japan’s net external assets reached at the end of 2024 ¥ 533.05 trillion ($ 3.7tr), according to the data released by the Ministry of Finance on Tuesday by around 13% compared to the previous year.
While the figure marked all time, it was overtaken by Germany, whose net external assets amounted to a total of ¥ 569.7th.
China remained in third place with net assets of ¥ 516.3tr. Japan started his line at the top through Germany in 1991.
The climb of Germany reflects its substantial surplus of the current account, which in 2024 reached € 248.7 billion ($ 283 billion), largely thanks to strong trade performance, as Bloomberg reported.
Japan’s surplus, in turn, was ¥ 29.4tr according to the Ministry of Finance, equal to around € 180 billion. Last year the Euro-Yen rate rose by around 5%, which is overlooking the increase in German assets versus Japanese in Yen terms.
The net foreign assets of a country are the value of its overseas assets minus the value of his domestic assets that are owned by foreigners, adapted for changes in currency values, and the figure is essentially reflected in the cumulative change in the current account of the country.
Finance Minister Katsunobu Kato indicated on Tuesday that he was not due to the development.
“Given that the net external assets of Japan have also increased steadily, the ranking should not be conceived as a sign that Japan’s position has changed considerably,” Kato told reporters.
For Japan, a weaker yen contributed to an increase in both foreign assets and liabilities, but assets grew faster, partly driven by extensive business investments abroad.
Tuesday’s data generally reflect broader trends in direct foreign investments.
In 2024, according to the ministry, Japanese companies maintained a robust appetite for foreign direct investments, in particular in the US and the UK.
Sectors such as finance, insurance and retailing attracted considerable capital of Japanese investors, the ministry said.
The increasing allocations of Japan funds to direct investments instead of foreign effects means that it is more difficult to repatriate funds quickly, according to Daisuke Karakama, Chief Market Economist at Mizuho Bank.
“It is easy to imagine your domestic investors who sell foreign bonds and effects when risks arise, but they are not going to dispose of foreign companies that they have so easily taken over,” said Karakama.
Looking ahead, the trajectory of outgoing investments can decrease to whether Japanese companies will continue to expand their overseas expenditure, especially in the US
With the tariff policy of US President Donald Trump in force, some companies can be encouraged to move production or transfer assets to the US to reduce trade -related risks.
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Posted on: 2025-05-27T11: 50: 54+05: 00
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