Japan lost its status as the world’s largest creditor for the first time in 34 years

For the first time in the last 34 years, Japan lost the status of the world’s largest creditor country, despite the record level of its foreign assets. However, the Ministry of Finance of the country said that this change does not cause them concern. About this informsReuters agency.

Japan’s net foreign assets at the end of 2024 amounted to ¥533.05 trillion (about $3.7 trillion), up 13% from the previous year. Despite this, the first place in the rating was taken by Germany with assets of 569.7 trillion yen. China retained the third position — 516.3 trillion yen. Japan has held the championship since 1991, ahead of Germany for more than three decades.

Germany’s advantage was secured by a large current account surplus of €248.7 billion in 2024 thanks to a strong trade balance. In Japan, this figure was 29.4 trillion yen, which is equivalent to approximately €180 billion. Additionally, a 5% year-over-year appreciation of the euro against the yen boosted the valuation of German yen-denominated assets, giving Germany an added advantage.

A country’s net foreign assets measure measures the difference between foreign assets and domestic assets owned by foreign residents, adjusted for currency fluctuations. In fact, it is a summary of changes in the country’s current account.

Japanese Finance Minister Katsunobu Kato emphasized that this change is not critical:

“Since Japan’s net foreign assets are also growing steadily, the mere fact of a rating change does not mean significant changes in the country’s position.”

The weakening of the yen affected the growth of both Japan’s foreign assets and liabilities, but the rate of growth in assets was higher, partly due to increased investment by Japanese businesses abroad.

It will be recalled that in July 2024, Japan spent 5.5 trillion yen (approximately $36.6 billion) to support the exchange rate of the national currency.