(May 26): Japan was overtaken by China as the world’s second largest creditor nation in 2025, despite setting a fresh record for its tally of overseas assets.
Japan’s net external assets rose to an all-time high of ¥561.8 trillion (US$3.5 trillion or $4.51 trillion) at the end of 2025, according to Finance Ministry data released Tuesday. Despite the increase, the total was surpassed by China, whose net external assets climbed at a faster pace to ¥636.3 trillion.
The shift came a year after Japan lost its position as the world’s largest creditor nation to Germany for the first time in 34 years. Germany remained at the top in 2025 with ¥675.5 trillion.
A country’s net foreign assets represent the value of overseas assets owned by residents minus domestic assets held by foreigners, adjusted for currency fluctuations. The figure broadly reflects cumulative current account balances over time.
The ministry said Germany and China’s stronger positions reflected larger current account surpluses, supported mainly by trade. At the same time, the slower growth in Japan’s net asset position also reflects a rise in the value of domestic assets held by foreign investors, particularly as Japanese stock prices rallied and boosted liabilities.
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Tuesday’s data showed Japan’s overseas assets rose 8.5% from a year earlier to roughly ¥1,806 trillion, driven by increased business investment abroad, particularly in the US and Switzerland. Sectors including finance and insurance, transportation equipment and nonferrous metals attracted significant Japanese investment, the ministry said.
Liabilities climbed 10.5% to ¥1,244 trillion, according to the ministry. The Nikkei 225 rose 26% over the year in 2025 to over 50,000.
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