For the first time in the last 34 years, Japan loses the title of the largest creditor country in the world. Perhaps the most striking element is that China did not take over the initiative, despite its huge exposure to the American public debt.
Tokyo teaches the title … Germany. According to data published on Tuesday by the Ministry of Japanese Finance, Japan's net external assets reached 533.05 trillion Yen (about 3.7 trillion dollars) at the end of 2024, registering an increase of almost 13% compared to the previous year.
Although this is a historical maximum, Germany has taken over the leadership, with a net external debts of 569.7 trillion. Yeni, while China remained third, with 516.3 trillion Yeni. Japan held the position of leader since 1991, when it exceeded Germany for the first time.
Germany's ascension to the head of credit countries reflects its huge current surplus, which reached 248.7 billion euros in 2024, mainly due to its exports.
Japan, according to the ministry, had a surplus of 29.4 trillion. Yeni (about 180 billion euros). The Euro-Yen exchange rate appreciated about 5% last year, further increasing the gap in favor of Germany.
The profile of the largest creditors change
According to an article in Bloomberg, Japan has won the title of the largest net creditor in the world due to the long -term current surplus, which allowed investors and companies to place massive capital amounts abroad. The loss of supremacy shows that, although Japanese external assets are increasing, the real impulse of investments has moved to countries such as Germany and China.
The net external assets of a country are defined as the difference between its claims abroad and the debts of foreign investors on internal assets, adjusted with the changes of foreign exchange courses.
Japan's Finance Minister Katsunobu Kato said he is not disturbed by this evolution: “Given that Japan's net external assets continue to grow constantly, the ranking itself should not be considered a indication of a substantial change of our position,” he told reporters.
The depreciation of the yen has contributed to the growth of both assets and external liabilities of Japan, the former increasing at a faster pace due to increased investments abroad.
The new image of Japanese investments
The data also reflects the general tendencies of foreign direct investments. Data from Japanese finance generally reflects wider trends in foreign direct investments.
In 2024, Japanese companies maintained a robust appetite for foreign direct investments, especially in the US and the United Kingdom, according to the ministry. Sectors such as finances, insurance and retail have attracted significant capital from Japanese investors, the ministry said.
Increasing allocations of Japan funds towards direct investments, rather than for foreign securities, means that it is more difficult to repatriate funds, according to Karakama. “It is easy to imagine our internal investors by selling foreign bonds and values when risks, but they will not give up the shares in the foreign companies they have purchased,” Karakama said.
The following moves – and the Trump factor
The investment imprint of Japan in the coming years will largely depend on the continuation of the expansion of operations abroad, mainly in the USA. Given the implementation of tariff policies by the Trump administration, several Japanese companies could be encouraged to relocate their production units or transfer active to the US to limit commercial risks.
On the other hand, increased uncertainty could push some companies to repatriate activities or avoid new investments in high risk markets.
