World's largest creditor position switched from Japan to Germany.
Article:
Germany Emerges as the World's Largest Creditor Nation, Dethroning Japan after 34 Years
Japan, which had held the title of the world's largest creditor nation for the past three decades, has been overtaken by Germany. The Japanese Finance Ministry confirmed this shift in ranking at the end of 2024. The journey to this new position was driven by Germany's consistently robust export-driven surpluses and favorable currency dynamics.
At the close of 2024, Germany boasted a net foreign asset value of 569.65 trillion yen (approximately 3.49 trillion euros), surpassing Japan's net overseas assets of 533.05 trillion yen (around 3.27 trillion euros). The Japanese government, however, played down the significance of this shift. Despite Japan's net overseas assets reaching a record high, the government maintained there was no indication of a major transformation in Japan's position.
Yoshimasa Hayashi, spokesman for the Japanese Finance Ministry, explained that they view the change in ranking as a natural fluctuation rather than a deep-seated change in Japan's economic status. A weaker yen relative to the euro during this period contributed to the rise in both Japan's overseas assets and liabilities. Nevertheless, the Ministry attributed the increase in net assets primarily to overseas investments made by Japanese firms.
Germany's current account surplus was a significant factor in its ascension to the top spot. In 2024, Germany posted a record surplus of €248.7 billion, compared to Japan's surplus of approximately €180 billion (¥29.4 trillion). Germany's strong export sector consistently outperformed imports, leading to the accumulation of substantial foreign assets. Furthermore, the euro's appreciation by around 5% against the yen in 2024 made Germany's net external assets appear even larger when converted into yen terms.
Sources: ntv.de, AFP
[1] Source1: Article title and abstract for 'Germany overtakes Japan as world’s largest creditor' (Date of Access: N/A)[2] Source2: Article title and abstract for 'Japan posts record-high net foreign assets, loses top creditor ranking to Germany' (Date of Access: N/A)[3] Source3: Data and analysis on German and Japanese overseas assets and current account surpluses (Date of Access: N/A)
The Commission may find it important to consider the role of finance in Germany's business sector, as the country's robust export-driven surpluses and favorable currency dynamics have contributed to its rise as the world's largest creditor nation. This shift in ranking, which saw Germany overtake Japan in 2024, could potentially impact global financial market dynamics and investment strategies.
