Germany’s ascent reflects its substantial current account surplus, which reached €248.7 billion in 2024 thanks largely to a strong trade performance. Japan’s surplus in turn was ¥29.4 trillion according to the finance ministry, equivalent to around €180 billion. Last year the euro-yen rate rose around 5%, exaggerating the increase in German assets versus Japanese in yen terms.
World's Largest Creditors | Germany's net external assets surpassed Japan's in 2024
Japan’s status as the world’s biggest net-creditor nation was a consequence of decades of current account surpluses that saw Japanese investors and companies load up on holdings abroad. Losing the title suggests that while Japan’s assets continue to rise, real demand has been stronger in other nations including Germany and China.
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A country’s net foreign assets are the value of its overseas assets minus the value of its domestic assets that are owned by foreigners, adjusted for changes in currency values, and the figure is essentially reflected in the cumulative change of the country’s current account.
Minister of Finance Katsunobu Kato signalled Tuesday that he was unperturbed by the development.
“Given that Japan’s net external assets have also been steadily increasing, the ranking alone should not be taken as a sign that Japan’s position has changed significantly,” Kato told reporters.
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For Japan, a weaker yen contributed to increases in both foreign assets and liabilities, but assets grew at a faster pace, driven in part by expanded business investment abroad.
Tuesday’s data generally reflect broader trends in foreign direct investment. In 2024, Japanese companies maintained a robust appetite for foreign direct investment, particularly in the US and UK, according to the ministry. Sectors such as finance, insurance and retail attracted significant capital from Japanese investors, the ministry said.
Japan’s increasing allocations of funds to direct investment rather than foreign securities means it’s more difficult to repatriate funds quickly, according to Karakama.
“It’s easy to imagine domestic investors selling foreign bonds and securities when risks emerge, but they’re not going to divest from overseas companies they’ve acquired so easily,” Karakama said.
Looking ahead, the trajectory of outbound investment may hinge on whether Japanese firms continue to expand their overseas spending, especially in the US. With President Donald Trump’s tariff policies in effect, some companies may be incentivized to relocate production or transfer assets to the US to mitigate trade-related risks.
On the other hand, the uncertainty may also encourage some companies to keep reshoring operations and avoid high-risk investments, Karakama added.
