Germany Takes the Top Spot! Japan Loses Its Status as the World's Largest Creditor Nation for the First Time in 34 Years

Data released by Japan's Ministry of Finance on Tuesday showed that despite Japan's overseas assets reaching a record high, it lost its position as the world's largest creditor country for the first time in 34 years.

The data indicated that as of the end of 2024, Japan's net foreign asset balance—the total overseas assets minus total overseas liabilities—reached 533.05 trillion yen (approximately $3.7 trillion), representing an increase of about 13% from the previous year.

Although this figure marked a record high, Germany's net foreign asset balance for the previous year (after conversion into yen) reached 569.7 trillion yen, surpassing Japan. China continued to rank third with 516.3 trillion yen.

Germany's rise to the top reflects the country's substantial current account surplus.

In 2024, Germany's current account surplus reached 248.7 billion euros, primarily driven by its robust trade performance. In contrast, data from Japan's Ministry of Finance showed that Japan's current account surplus for the previous year was 29.4 trillion yen, equivalent to approximately 180 billion euros.

Last year, the euro appreciated by about 5% against the yen, further widening the growth in Germany's net foreign assets (denominated in yen) relative to Japan's.

For Japan, the depreciation of the yen led to an increase in both its overseas assets and liabilities, but the growth rate of assets was faster, partly due to the expansion of overseas business investments.

The data showed that as of the end of last year, the total assets held overseas by the Japanese government, enterprises, and individuals reached 1,659.221 trillion yen, marking an 11.4% increase and the 16th consecutive year of growth. In terms of overseas liabilities (i.e., assets held by foreign investors in Japan), they increased by 108.5 trillion yen over the same period to 1,125.97 trillion yen, representing an increase of about 10.7%. This growth momentum has also persisted for six years.

These data reflect the overall trend in foreign direct investment. According to Japan's Ministry of Finance, in 2024, Japanese enterprises maintained strong interest in foreign direct investment, particularly in the US and the UK. Sectors such as finance, insurance, and retail attracted significant capital from Japanese investors.

Looking ahead, the trend in outward investment may depend on whether Japanese enterprises continue to expand their overseas spending, especially in the US. With the implementation of US President Trump's tariff policies, some enterprises may consider mitigating trade risks by transferring capacity or assets to the US.