Japan became third-largest creditor after Germany and China
In 2025, China surpassed Japan to become the world’s second largest creditor nation, even as Japan achieved a new high in its total overseas assets. Japan’s net external assets increased to a record ¥561.8 trillion at the end of 2025, as reported by the Finance Ministry on Tuesday. Despite the increase, the total was surpassed by China, whose net external assets climbed at a faster pace to ¥636.3 trillion. The shift occurred a year after Japan relinquished its status as the world’s largest creditor nation to Germany for the first time in 34 years. Germany maintained its position at the forefront in 2025 with ¥675.5 trillion. A country’s net foreign assets signify the valuation of overseas assets owned by residents, subtracting the domestic assets held by foreigners, while accounting for currency fluctuations.
The figure broadly reflects cumulative current account balances over time. The ministry indicated that the enhanced positions of Germany and China were indicative of larger current account surpluses, primarily bolstered by trade activities. Simultaneously, the deceleration in Japan’s net asset position is indicative of an increase in the value of domestic assets owned by foreign investors, especially as Japanese stock prices surged, thereby elevating liabilities. Tuesday’s data indicated that Japan’s overseas assets increased by 8.5% compared to the previous year, reaching approximately ¥1,806 trillion.
This growth was primarily fuelled by heightened business investment abroad, especially in the United States and Switzerland. Sectors such as finance and insurance, transportation equipment, and nonferrous metals have drawn considerable Japanese investment, according to the ministry. Liabilities increased by 10.5 percent to ¥1,244 trillion, as reported by the ministry. The Nikkei 225 experienced a 26 per cent increase over the year in 2025, surpassing the 50,000 mark.
