Japan has lost the title of being the world’s largest creditor nation, a title that it held for 34 years. Despite recording a new high in overseas assets, Japan was overtaken by Germany in 2024, reported Bloomberg.
According to Japan’s Ministry of Finance, the country’s net external assets rose by 13% from the previous year, reaching ¥533.05 trillion (around $3.7 trillion). However, Germany surpassed this with ¥569.7 trillion in net assets. China followed in third place with ¥516.3 trillion.
Germany’s rise to the top is mainly due to its strong trade performance, which led to a current account surplus of €248.7 billion last year. In comparison, Japan posted a surplus of ¥29.4 trillion—roughly €180 billion. The appreciation of the euro against the yen by around 5% in 2024 also made Germany’s assets appear larger in yen terms, the Bloomberg report said.
In Japan’s case, a weaker yen helped increase both foreign assets and liabilities, though assets grew more rapidly. This was largely driven by Japanese companies investing more abroad, the Bloomberg report said.
These numbers reflect broader trends in foreign direct investment. In 2024, Japanese firms remained active investors, particularly in the United States and the United Kingdom. Industries such as finance, insurance, and retail attracted the most capital from Japan, their Ministry of Finance noted.
Looking forward, the future of Japan’s overseas investments will likely depend on whether its companies keep increasing their spending abroad, particularly in the United States. With tariff measures under President Donald Trump still in place, some firms might consider moving their production or assets to the US to reduce the impact of trade restrictions.