Japan loses top creditor status for first time in 34 years
China remains in third place with net assets of 516.3 trillion yen
[TOKYO] 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 533.1 trillion yen (S$4.8 trillion) at the end of 2024, rising about 13 per cent from the previous year, according to data released on Tuesday (May 27) by the Ministry of Finance.
While the figure marked an all-time high, it was overtaken by Germany, whose net external assets totalled 569.7 trillion yen. China remained in third place with net assets of 516.3 trillion yen.
Germany’s ascent reflects its substantial current account surplus, which reached 248.7 billion euros (S$364 trillion) in 2024 thanks largely to a strong trade performance. Japan’s surplus in turn was 29.4 trillion yen according to the finance ministry, equivalent to around 180 billion euros.
Last year the euro-yen rate rose around 5 per cent, 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.
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. BLOOMBERG
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