Japan slips to world no. 3
What happened
- Japan’s Finance Ministry said on May 26 that the country’s net external assets rose to a record ¥561.8 trillion at the end of 2025. - Germany ranked first at ¥675.5 trillion and China second at ¥636.3 trillion, based on IMF exchange rates cited in the ministry data. - By the end of May each year, Japan’s annual international investment position is reported to the Cabinet under the foreign exchange law.
Why it matters
Japan’s Finance Ministry said on May 26 that the country’s net external assets rose 4.4% from a year earlier to ¥561.8 trillion at the end of 2025, even as Japan fell to third place in the global creditor ranking. The data showed Germany remained first and China moved ahead of Japan into second place. The figures are part of Japan’s annual international investment position report, which the ministry publishes after reporting to the Cabinet by the end of May. ### What exactly moved Japan down the ranking? China’s net external assets reached ¥636.3 trillion at the end of 2025, above Japan’s ¥561.8 trillion, according to figures cited by Jiji Press from Japan’s Finance Ministry report. Germany stayed in first place at ¥675.5 trillion. The ranking is based on exchange rates published by the International Monetary Fund, Jiji said. (mof.go.jp) Japan had already lost the top spot to Germany a year earlier. Jiji said Japan was the world’s largest net creditor through the end of 2023, then dropped to second at the end of 2024 and to third at the end of 2025. ### What does “net external assets” measure here? Japan’s Finance Ministry defines the international investment position as a statement of the value and composition of Japan’s external financial assets and liabilities outstanding at the end of each year. (sp.m.jiji.com) Jiji described Japan’s net external assets as overseas assets owned by the government, companies and individuals minus their external debts, including foreign investments in Japan. The ¥561.8 trillion figure means Japan still holds a very large stock of overseas claims on a net basis. The change in ranking does not mean those assets fell; it means other countries’ net positions increased more. ### Why did Germany and China stay ahead? Germany’s ¥675.5 trillion and China’s ¥636.3 trillion net external asset positions grew faster than Japan’s, Jiji reported. (mof.go.jp) Jiji attributed that comparison to the fact that Germany and China run trade surpluses, while Japan has a trade deficit. The Japan Times also reported that Japan’s net external assets rose to an all-time high at the end of 2025, but China’s total climbed faster and overtook it. (sp.m.jiji.com) ### How should this be read in context? The Finance Ministry data show Japan’s external balance sheet is still expanding. Jiji said 2025 was the seventh straight year that Japan posted a record-high net external asset position. (sp.m.jiji.com) The annual ranking is one way investors and officials compare countries’ accumulated overseas financial strength, but the ministry’s release itself is a statistical report rather than a policy statement. (japantimes.co.jp) The underlying publication is the international investment position, which the ministry says is released each year after the Cabinet reporting process required by the Foreign Exchange and Foreign Trade Law. (sp.m.jiji.com) ### When does the next official update come? May 26, 2026 was the release date for the end-2025 annual report on Japan’s international investment position, according to the Finance Ministry’s English-language statistics page. The same page lists quarterly estimates separately, while the next annual update will cover end-2026 positions and, under the ministry’s stated timetable, would be reported by the end of May in 2027. (mof.go.jp)
Key numbers
- Japan’s Finance Ministry said on May 26 that the country’s net external assets rose to a record ¥561.8 trillion at the end of 2025.
- Germany ranked first at ¥675.5 trillion and China second at ¥636.3 trillion, based on IMF exchange rates cited in the ministry data.
- Japan’s Finance Ministry said on May 26 that the country’s net external assets rose 4.4% from a year earlier to ¥561.8 trillion at the end of 2025, even as Japan fell to third place in the global creditor ranking.
- China’s net external assets reached ¥636.3 trillion at the end of 2025, above Japan’s ¥561.8 trillion, according to figures cited by Jiji Press from Japan’s Finance Ministry report.
What happens next
- Japan’s Finance Ministry said on May 26 that the country’s net external assets rose 4.4% from a year earlier to ¥561.8 trillion at the end of 2025, even as Japan fell to third place in the global creditor ranking.
- The figures are part of Japan’s annual international investment position report, which the ministry publishes after reporting to the Cabinet by the end of May.
- (sp.m.jiji.com) When does the next official update come?
Quick answers
What happened in Japan slips to world no. 3?
Japan’s Finance Ministry said on May 26 that the country’s net external assets rose to a record ¥561.8 trillion at the end of 2025. Germany ranked first at ¥675.5 trillion and China second at ¥636.3 trillion, based on IMF exchange rates cited in the ministry data. By the end of May each year, Japan’s annual international investment position is reported to the Cabinet under the foreign exchange law.
Why does Japan slips to world no. 3 matter?
Japan’s Finance Ministry said on May 26 that the country’s net external assets rose 4.4% from a year earlier to ¥561.8 trillion at the end of 2025, even as Japan fell to third place in the global creditor ranking. The data showed Germany remained first and China moved ahead of Japan into second place. The figures are part of Japan’s annual international investment position report, which the ministry publishes after reporting to the Cabinet by the end of May. What exactly moved Japan down the ranking? China’s net external assets reached ¥636.3 trillion at the end of 2025, above Japan’s ¥561.8 trillion, according to figures cited by Jiji Press from Japan’s Finance Ministry report. Germany stayed in first place at ¥675.5 trillion. The ranking is based on exchange rates published by the International Monetary Fund, Jiji said. (mof.go.jp) Japan had already lost the top spot to Germany a year earlier. Jiji said Japan was the world’s largest net creditor through the end of 2023, then dropped to second at the end of 2024 and to third at the end of 2025. What does “net external assets” measure here? Japan’s Finance Ministry defines the international investment position as a statement of the value and composition of Japan’s external financial assets and liabilities outstanding at the end of each year. (sp.m.jiji.com) Jiji described Japan’s net external assets as overseas assets owned by the government, companies and individuals minus their external debts, including foreign investments in Japan. The ¥561.8 trillion figure means Japan still holds a very large stock of overseas claims on a net basis. The change in ranking does not mean those assets fell; it means other countries’ net positions increased more. Why did Germany and China stay ahead? Germany’s ¥675.5 trillion and China’s ¥636.3 trillion net external asset positions grew faster than Japan’s, Jiji reported. (mof.go.jp) Jiji attributed that comparison to the fact that Germany and China run trade surpluses, while Japan has a trade deficit. The Japan Times also reported that Japan’s net external assets rose to an all-time high at the end of 2025, but China’s total climbed faster and overtook it. (sp.m.jiji.com) How should this be read in context? The Finance Ministry data show Japan’s external balance sheet is still expanding. Jiji said 2025 was the seventh straight year that Japan posted a record-high net external asset position. (sp.m.jiji.com) The annual ranking is one way investors and officials compare countries’ accumulated overseas financial strength, but the ministry’s release itself is a statistical report rather than a policy statement. (japantimes.co.jp) The underlying publication is the international investment position, which the ministry says is released each year after the Cabinet reporting process required by the Foreign Exchange and Foreign Trade Law. (sp.m.jiji.com) When does the next official update come? May 26, 2026 was the release date for the end-2025 annual report on Japan’s international investment position, according to the Finance Ministry’s English-language statistics page. The same page lists quarterly estimates separately, while the next annual update will cover end-2026 positions and, under the ministry’s stated timetable, would be reported by the end of May in 2027. (mof.go.jp)
