Japan Dethroned As World’s Top Creditor Nation After 34 Years: Guess Who Took The Lead

Japan has lost its status as the world’s largest creditor nation for the first time in 34 years, even as it posted a record high in net external assets.

According to data released Tuesday by Japan’s Ministry of Finance, the country’s net external assets stood at ¥533.05 trillion ($3.7 trillion) at the end of 2024, up 13% from the previous year.

But Germany surpassed that figure with net external assets totalling ¥569.7 trillion, pushing Japan to second place. China remained in third with ¥516.3 trillion in net assets.

Germany’s Trade Surplus and Strong Euro Drive the Shift
Germany’s climb to the top was powered by a substantial current account surplus of €248.7 billion in 2024, boosted by a strong export performance. In comparison, Japan’s current account surplus was ¥29.4 trillion—about €180 billion.
 

Adding to Germany’s advantage was currency movement: the euro rose around 5% against the yen last year, which inflated the yen-denominated value of German assets, according to the Ministry of Finance.

Weaker Yen Helps Japan Expand Its Global Investments
While Japan lost its crown, the weaker yen still played a key role in expanding its foreign assets faster than its liabilities. Japanese companies maintained a robust appetite for foreign direct investment, particularly in the US and UK, as per the ministry.

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Significant capital flowed into sectors like finance, insurance, and retail, as Japanese firms looked for long-term international growth.

Trade Policies May Reshape Investment Strategy
Looking forward, Japan’s outbound investment strategy may be influenced by global trade policies. With Donald Trump’s tariff regime reinstated in the US, some Japanese firms might move production or shift assets stateside to cushion against trade risks.

Japan Stock Market

On Tuesday, Japan's Nikkei 225 closed 0.51% up at 37,724.11, with the broader Topix index also gaining 0.64% to reach 2,769.49.

(With Inputs From Bloomberg)