How Japan’s overseas investments reached a historic high

Japan's net external assets reached a new record of ¥533.1 trillion (approximately $3.73 trillion) in 2024, marking a 12.9% increase, or ¥60.9 trillion, from the previous year. This was the seventh consecutive year of growth, driven by a weakening yen and a strong appetite among Japanese companies for overseas mergers and acquisitions. (Source: Reuters)

Despite the record figure, Japan lost its position as the world’s largest creditor nation for the first time in 34 years. Germany overtook Japan with net external assets of ¥569.7 trillion, while China followed in third place with ¥516.3 trillion. This marked a significant reshuffle in the global financial standings.

A major factor in the asset increase was the depreciation of the yen. The US dollar appreciated by 11.7% against the yen, and the euro by 5%, which inflated the yen-denominated value of Japan’s existing overseas assets. Additionally, Japanese companies remained active in acquiring foreign businesses, further boosting the country’s external wealth.

At the end of 2024, Japan’s gross external assets stood at ¥1,659 trillion, an increase of ¥169 trillion from the previous year. On the other hand, the country’s external liabilities also rose to ¥1,126 trillion, up by ¥109 trillion. This reflects both increased international exposure and expanding global financial interactions.

Japan’s Ministry of Finance also released revised figures for the country’s current account. For the full year 2024, Japan logged a surplus of ¥29.4 trillion, slightly higher than the preliminary estimate of ¥29.3 trillion. The current account remains a key indicator of the nation’s financial health.

Japan continues to maintain a strong external position, with overseas assets reaching an all-time high. However, the country has now ceded its long-held top creditor status to Germany. The shift highlights changing global dynamics, with currency fluctuations and cross-border investments playing a critical role in shaping financial balances.


(Disclaimer: This slideshow has been sourced from Reuters)