Japan loses the situation as the world’s largest creditor nation because Germany claims the title after 34 years

Japan is no longer the major creditor nation of the world – and this is the first in 34 years! Despite Japan’s record foreign property, Germany has topped. Japan topped the 1991 after crossing Germany.Japan’s position as the world’s major net-creditor nation over the years was due to decades of the current account surplus for decades, making adequate foreign investment by Japanese institutions.According to the Finance Ministry data cited by Bloomberg, the net external assets of Japan reached 533.05 trillion ($ 3.7 trillion) at the end of 2024, with an increase of 13% from the previous year. Although this figure was a record high, Germany was a record high. 569.7 crossed with pure external assets of trillion. China. Maintained his third place with net assets of 516.3 trillion.The rise of Germany at the top position is attributed to its sufficient current account surplus of € 248.7 billion in 2024, mainly due to strong trade performance. In comparison, according to the Ministry of Finance, Japan’s surplus, 29.4 trillion, was around € 180 billion. The disadvantage of this situation indicates that whenever the property of Japan increases, other countries including Germany and China have experienced real demand.Also read ‘Will not discuss …’: The US tells the WTO that India has no basis for implementing anti -retaliation on 29 American products.The net foreign property of a nation represents the difference between its foreign property and domestic assets owned by foreigners, which is adjusted for currency value changes. This calculation essentially reflects cumulative changes in the current account of the country.The Euro-In exchange rate increased by about 5% last year, increasing the difference between the German and Japanese assets when measured in the yen.On Tuesday, Finance Minister Katsunu Kato indicated that he was not worried about this development.Kato explained to reporters that the continuous increase in Japan’s net external property means that the ranking should not be seen as a significant change in Japan’s standing.Japan experienced an increase in both foreign assets and liabilities, in which the assets showed a strong growth due to an increase in international trade investment, affected by the depreciation of the yen.The data released on Tuesday aligns with comprehensive foreign direct investment patterns. The ministry reported that Japanese firms maintained strong foreign direct investment in 2024, especially in the US and Britain markets, flowing adequate investment in finance, insurance and retail sectors.Also read Explained in the chart: India soon to become the 4th largest world economy. What is the road ahead of No.3 Spot?According to Karkama, the change towards direct investment of Japan instead of foreign securities has made capital repatriation less flexible.Bloomberg quoted Karakama as saying, “It is easy to imagine domestic investors selling foreign bonds and securities when the risk emerges, but they are not going to divide from foreign companies that they have achieved so easily.”The future direction of outbound investment may depend on the foreign expansion of Japanese companies, especially in the US. President Donald Trump’s tariff policies may affect some firms to transfer property or production to the US to overcome business concerns.However, Karkama said that these uncertainty may also lead some companies to prioritize domestic operations and to avoid high risk investments.