Japan Falls Behind Germany with USD3.7T in Net Assets
(MENAFN) For the first time in 34 years, Japan has been dethroned as the world’s largest creditor nation, slipping behind Germany despite reaching record levels in its net foreign assets, a news agency reported Tuesday.
According to data from Japan’s Finance Ministry, by the end of 2024, Japan’s net external assets increased by 12.9% year-on-year, reaching ¥533.05 trillion (approximately USD3.7 trillion), surpassing the ¥500 trillion mark for the first time ever.
Still, Japan’s figure fell short of Germany’s ¥569.65 trillion (around USD3.98 trillion) in net foreign assets, securing Berlin’s top global position.
The ministry attributed Germany’s lead largely to its significant current account surplus, while Japan’s weaker yen inflated the yen-denominated value of its overseas holdings, which include stocks, bonds, and other financial assets.
Japan’s total external assets rose 11.4% to ¥1,659.02 trillion (USD11.5 trillion), driven by robust direct investments from Japanese trading firms and financial institutions, especially in the United States. This marked the seventh consecutive year of growth in Japan’s net external credit.
On the liabilities side, Japan’s external obligations increased by 10.7% to ¥1,125.97 trillion (USD7.8 trillion). The yen’s depreciation against the dollar was a major factor, with the dollar trading at ¥157.89 at the end of 2024—up 11.7% from ¥141.40 a year earlier.
Currently, Japan ranks second worldwide in net foreign assets at ¥516.28 trillion (USD3.58 trillion), trailing only China. Meanwhile, the United States remains the largest net debtor globally, with external liabilities surpassing its foreign assets by ¥4,109.26 trillion (approximately USD26.03 trillion).
The Finance Ministry emphasized that all international figures were converted to yen using end-of-year exchange rates provided by the IMF.
Net foreign assets are determined by subtracting foreign ownership of domestic assets from the value of residents’ overseas assets, factoring in currency fluctuations.
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