Key Points
- Germany is now the world’s largest creditor, ending Japan’s 34-year reign, according to data from the Rìběn Cáiwù Shěng (日本财务省).
- As of the end of 2024, Germany’s net external assets were approximately ¥569.7 trillion JPY ($3.95 trillion USD), surpassing Japan’s ¥533.05 trillion JPY ($3.7 trillion USD).
- Germany’s climb is largely attributed to its significant current account surplus, driven by strong trade performance and a favorable euro-yen exchange rate.
- Despite losing the top spot, Japan reached a record high in total overseas assets at ¥1659.221 trillion JPY ($11.52 trillion USD) by the end of 2024, consistent growth for the 16th year.
- Japanese companies significantly increased foreign direct investment (FDI) in 2024, particularly in the United States and the United Kingdom in sectors like finance, insurance, and retail.
Germany now tops the global creditor ranking, marking a significant shift in the world’s financial landscape as Japan relinquishes a title it held for over three decades.
Fresh data dropped by the Rìběn Cáiwù Shěng (日本财务省), Japan’s Ministry of Finance, on Tuesday, May 27, 2025, reveals a fascinating turn of events.
Even though Japan’s overseas assets hit a record high, it’s no longer the globe’s biggest creditor nation – a position it proudly maintained for 34 consecutive years.
The New Pecking Order: Who Holds the IOUs?
Let’s break down the numbers:
As of the end of 2024, Japan’s net external assets (that’s total overseas assets minus total overseas liabilities) climbed to a whopping ¥533.05 trillion JPY (approximately $3.7 trillion USD).
This is an impressive 13% jump from the previous year and a historical high for Japan.
However, Germany swooped in with even bigger figures.
Germany’s net external assets at the end of last year, when converted into Japanese yen, reached ¥569.7 trillion JPY (around $3.95 trillion USD), officially nudging Japan out of the top spot.
China continues to hold strong in third place, with ¥516.3 trillion JPY (approximately $3.58 trillion USD) in net external assets.
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Why the Big Switch? Germany’s Economic Engine Roars
So, what’s fueling Germany’s ascent to the top of the global creditor ranking?
It boils down to Germany’s hefty current account surplus.
In 2024, Germany’s current account surplus hit a staggering €248.7 billion EUR.
This surplus was primarily supercharged by its strong trade performance.
For comparison, Japan’s Ministry of Finance data shows its current account surplus last year was ¥29.4 trillion JPY (roughly €180 billion EUR).
Adding another layer to this, the euro flexed its muscles against the yen, appreciating by about 5% last year.
This currency movement further amplified the growth of Germany’s net external assets when calculated in yen, giving it an edge over Japan.
Japan’s Story: Record Assets Amidst a Shifting Tide
For Japan, it’s a tale of two cities: a depreciating yen and expanding overseas investments.
The weaker yen actually inflated both its overseas assets and liabilities (in yen terms).
But here’s the kicker: assets grew faster, partly thanks to Japanese businesses ramping up their overseas business investment.
A Deep Dive into Japan’s Overseas Holdings:
- By the end of 2024, total assets held overseas by the Japanese government, companies, and individuals soared to ¥1659.221 trillion JPY (approx. $11.52 trillion USD).
- This represents an 11.4% increase and marks the 16th year in a row of growth. Wow!
- On the flip side, overseas liabilities (assets held by foreign investors in Japan) also grew.
- They increased by ¥108.5 trillion JPY (approx. $0.75 trillion USD) during the same period.
- This brought total liabilities to ¥1125.97 trillion JPY (approx. $7.81 trillion USD), an increase of about 10.7%.
- This growth in liabilities has been a consistent trend for six years now.
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The FDI Game: Where is Japanese Money Flowing?
These figures paint a clear picture of foreign direct investment (FDI) trends.
According to the Rìběn Cáiwù Shěng (日本财务省), Japanese companies showed a sustained, strong appetite for FDI in 2024.
Key hotspots for this investment? The United States and the United Kingdom.
Sectors like finance, insurance, and retail were particularly attractive magnets for Japanese investors.
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Looking Ahead: What’s Next for Overseas Investment?
- Continued Japanese corporate spending abroad, especially in the U.S.
- Impact of potential policy shifts, such as President Trump’s tariff policies.
- Possibility of companies relocating production or shifting assets to the U.S. to manage trade risks.
The crystal ball for future overseas investment depends heavily on a few factors.
A big one is whether Japanese companies will continue their spending spree abroad, especially in the U.S.
With policy shifts on the horizon, like the implementation of President Trump’s tariff policies, things could get interesting.
Some companies might eye relocating production capacity or shifting assets to the U.S. as a strategy to navigate potential trade risks.
This saga of global finance is ever-evolving, and this shift in creditor nation status is a major chapter. It highlights the dynamic interplay of trade, currency values, and international investment strategies, signaling a new era with Germany now topping the global creditor ranking.
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