Japan's Overseas Assets Hit Record 533.05 Trillion Yen, Loses Top Creditor Title to Germany

Japan's net overseas assets reached an all-time high of 533.05 trillion yen (approximately 3.7 trillion USD) by the end of 2024, marking a 13% increase from the previous year. This growth has been consistent for the seventh consecutive year. However, despite this record, Japan has lost its position as the world's largest creditor nation, a title it has held for 34 years. Germany has now surpassed Japan with net overseas assets totaling 569.7 trillion yen. This shift is largely due to the 5% appreciation of the euro against the yen, which has amplified the value of German assets relative to Japan's.

Germany's rise to the top is not accidental. The country's current account surplus for 2024 was 248.7 billion euros, driven by strong trade performance. In contrast, Japan's surplus was 29.4 trillion yen, approximately 180 billion euros. The depreciation of the yen has been a double-edged sword for Japan. While it has boosted the value of overseas assets, it also reflects deeper economic issues. Japanese companies, facing a lackluster domestic market, have been compelled to seek opportunities abroad, leading to a situation where capital outflow drives the growth in overseas assets but also highlights the stagnation in the domestic economy.

The depreciation of the yen has been a significant factor in Japan's overseas asset growth. However, it also underscores the challenges Japan faces in maintaining its economic competitiveness. The potential relocation of Japanese production bases or assets to the United States, in response to trade policies, could further alter Japan's investment landscape. This shift could have profound implications for Japan's future overseas asset growth and its role in the global economy.