Japan loses top creditor position for 1st time in 34 years

ISTANBUL

Japan has lost its long-held title as the world’s largest creditor nation for the first time in 34 years, falling behind Germany despite posting record-high net foreign assets, Kyodo News reported Tuesday.

Data released by the Japanese Finance Ministry showed that as of the end of 2024, Japan's net external assets rose 12.9% from the previous year to ¥533.05 trillion ($3.7 trillion), topping the ¥500 trillion mark for the first time.

However, this figure was still lower than Germany’s ¥569.65 trillion ($3.98 trillion) in net assets, which placed Berlin in the top global position.

The ministry said Germany's substantial current account surplus played a key role, while Japan’s lower yen value inflated the local-currency value of its foreign holdings, including stocks, bonds, and other assets.

Japan's total external assets grew 11.4% to ¥1,659.02 trillion, buoyed by strong direct investment from Japanese trading houses and financial institutions, particularly in the US. Net external credit rose for the seventh straight year.

Meanwhile, Japan’s external liabilities climbed 10.7% to ¥1,125.97 trillion. The depreciation of the yen also played a significant role, with the dollar trading at ¥157.89 at the end of 2024, up 11.7% from ¥141.40 a year earlier.

At ¥516.28 trillion, Japan now ranks second globally in net foreign assets, behind China. The US, by contrast, remains the world’s largest net debtor, with external liabilities exceeding foreign assets by ¥4,109.26 trillion (appr. $26.03 trillion).

The ministry noted that all figures for other countries were converted into yen using end-of-year IMF exchange rates.

Net foreign assets are calculated by subtracting the value of domestic assets owned by foreigners from the value of overseas assets held by residents, with adjustments for currency fluctuations.

ISTANBUL

However, this figure was still lower than Germany’s ¥569.65 trillion ($3.98 trillion) in net assets, which placed Berlin in the top global position.

The ministry noted that all figures for other countries were converted into yen using end-of-year IMF exchange rates.

Net foreign assets are calculated by subtracting the value of domestic assets owned by foreigners from the value of overseas assets held by residents, with adjustments for currency fluctuations.