Japan lost its position as the world’s largest creditor nation for the first time in 34 years, despite posting a record amount of overseas assets.
Japan’s net external assets reached JPY533.05 trillion ($4.81 trillion) at the end of 2024, rising about 13% from the previous year, according to data released Tuesday by the Ministry of Finance. While the figure marked an all-time high, it was overtaken by Germany, whose net external assets totalled JPY569.7 trillion. China remained in third place with net assets of JPY516.3 trillion.
Germany’s ascent reflects its substantial current account surplus, which reached EUR248.7 billion ($363.75 billion) in 2024 thanks largely to a strong trade performance.
Japan’s surplus in turn was JPY29.4 trillion according to the finance ministry, equivalent to around EUR180 billion. Last year the euro-yen rate rose around 5%, exaggerating the increase in German assets versus Japanese in yen terms.
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.
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The 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.
Looking ahead, the trajectory of outbound investment may hinge on whether Japanese firms continue to expand their overseas spending, especially in the US. With US President Donald Trump’s tariff policies in effect, some companies may be incentivised to relocate production or transfer assets to the US to mitigate trade-related risks.
Chart: Bloomberg
