Germany Surpasses Japan as World’s Top Creditor

(MENAFN) Japan has relinquished its status as the world’s leading creditor for the first time in over three decades, based on a report by a news agency.

Despite recording an unprecedented level of net overseas assets, Japan was overtaken by Germany, ending its 34-year reign at the top.

Information published by Japan’s Finance Ministry indicated that by the conclusion of 2024, the country’s net foreign holdings surged by 12.9 percent compared to the prior year, reaching YEN533.05 trillion (approximately USD3.7 trillion).

This marked the first occasion Japan’s net overseas assets exceeded YEN500 trillion.

Nonetheless, this impressive figure was still below Germany’s total of YEN569.65 trillion (USD3.98 trillion), which positioned Berlin as the leading global creditor.

The ministry attributed Germany’s advantage to its significant current account surplus, while Japan’s weaker yen increased the value of its foreign investments—such as equities and bonds—when converted to local currency.

Japan's overall international assets expanded by 11.4 percent to YEN1,659.02 trillion, largely supported by robust outbound investment from Japanese trading conglomerates and financial firms, particularly into the United States.

The country also experienced a rise in its net external credit for the seventh year in succession.

Simultaneously, Japan’s foreign liabilities increased by 10.7 percent, reaching YEN1,125.97 trillion.

The yen’s depreciation played a major part, as the exchange rate hit YEN157.89 to the dollar at the end of 2024—an 11.7 percent rise from YEN141.40 the year before.

Currently, Japan occupies second place worldwide in terms of net foreign assets, at YEN516.28 trillion, trailing behind China.

On the other hand, the United States continues to be the globe’s most indebted country, with liabilities outstripping overseas holdings by a margin of YEN4,109.26 trillion (around USD26.03 trillion).

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