By Kakidai - Wikipedia
Japan has relinquished its long-held position as the world’s largest creditor nation for the first time in 34 years, even as it posted a record level of overseas assets. According to data released Tuesday by Japan’s Ministry of Finance, the country’s net external assets stood at ¥533.05 trillion ($3.7 trillion) at the end of 2024, marking a rise of approximately 13 percent from the previous year.
Despite reaching an all-time high, Japan was overtaken by Germany, whose net external assets totaled ¥569.7 trillion. China remained the third-largest creditor, with net external assets amounting to ¥516.3 trillion. Germany’s ascent to the top spot was underpinned by a sizeable current account surplus of €248.7 billion in 2024, primarily driven by a strong export performance.
In contrast, Japan recorded a current account surplus of ¥29.4 trillion, or roughly €180 billion. The appreciation of the euro against the yen—about 5 percent over the past year—amplified the valuation of German assets in yen terms, contributing to the shift in rankings.
While the depreciation of the yen boosted both Japan’s overseas assets and liabilities, asset growth outpaced that of liabilities. This expansion was largely fueled by increased outbound investment, particularly in business sectors abroad. Japanese companies continued to show strong interest in foreign direct investment throughout 2024, with notable capital flows directed to the United States and the United Kingdom, the finance ministry noted.
The report highlighted that Japanese investment targeted industries such as finance, insurance, and retail. These sectors attracted substantial funds from Japanese firms looking to diversify and grow their global footprint.
Looking forward, the direction of Japan’s outbound investment could be influenced by corporate strategies tied to evolving trade conditions. With former U.S. President Donald Trump’s tariff measures still in effect, some Japanese companies may opt to shift production facilities or transfer assets to the U.S. in a bid to minimize exposure to trade-related uncertainties.
