Japan lost a financial crown it held for decades; Here’s what changed
Synopsis
Japan global creditor ranking slipped to third place after China overtook the country in net external assets despite record overseas holdings. Finance Ministry data showed overseas investments continued rising, while foreign ownership of Japanese equities and bonds lifted the country’s liabilities amid stronger market inflows and global capital movement.
Japan global creditor ranking fell to third in 2025 as China overtook Japan in net external assets while Germany retained the top position among creditor nations globally.
Key Highlights
- Japan global creditor ranking dropped to third place behind Germany and China.
- Japan’s net external assets reached a record 561.75 trillion yen in 2025.
- China reported 636.3 trillion yen in net external assets, overtaking Japan globally.
- Foreign investment in Japanese equities and bonds pushed liabilities sharply higher.
Japan was ranked third among global creditors, behind China in terms of net external assets, according to latest data published by Japan's Finance Ministry.
The value of Japan's net external assets increased to a record 561.75 trillion yen ($3.53 trillion), up 4.4% on the year. The figures represent the overseas assets held by Japanese companies, investors and the government, net of domestic assets held by foreign investors.
China has become the world's second-largest net external asset holder with 636.3 trillion yen, with Germany still leading as the world's largest creditor nation with 675.5 trillion yen. IMF data was used for compiling the data. (Reuters)
Business continues to grow in overseas territories
The gross external assets of the Japanese government rose by 8.5% to 1.806 quadrillion yen in 2025, according to the Japan global creditor ranking report.
Japanese firms went on making overseas investments and acquisitions, especially in finance, industrial manufacturing, and transportation equipment and insurance. Data from the ministry revealed increased investment in North America and Europe as businesses spread out their production and supply chains.
The country continues to be one of the largest overseas investors in the world. In March 2026, the Fed's most recent U.S. Treasury Department data reveals that Japan was the top foreign holder of U.S. government debt with holdings of about $1.19 trillion.
Foreign investors want to boost their exposure to Japan
Foreign investors' holdings of Japanese stocks and bonds rose, driving Japan's external liabilities up 10.5% to 1.244 quadrillion yen.
Japanese shares owned by foreign investors saw their value increase as the Nikkei 225 rose by about 26% in 2025 and hit the 50,000 mark during the year. Recent inflows into Japanese stocks were attributed to the semiconductor demand, manufacturing recovery, and investment into artificial intelligence stocks in the Asian markets.
The fourth largest net external asset was held by Hong Kong with 320.3 trillion yen, followed by Norway with 271.8 trillion yen. Other economies that were still large creditors in the list included Singapore, Switzerland and Saudi Arabia.
FAQs
Q1. Why did Japan lose its global creditor ranking position?
China’s net external assets grew faster than Japan’s in 2025, moving China ahead in global creditor rankings.
Q2. Which country is now the world’s largest creditor nation?
Germany remained the world’s top creditor nation with net external assets of 675.5 trillion yen.
Q3. Why are Japan’s overseas assets important to global markets?
Japan is one of the world’s biggest overseas investors and the largest foreign holder of U.S. Treasury securities.
Follow Inspirepreneur Magazine for daily global business news.
Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
