Japan has fallen behind China to rank as the world’s third-largest net creditor in 2025, marking a further decline in global rankings despite its net external assets reaching an all-time record, the Finance Ministry said on Tuesday, News.Az reports, citing Reuters.

Net external assets held by the Japanese government, businesses, and individuals rose 4.4% from a year earlier to 561.75 trillion yen ($3.53 trillion).

This marked the eighth consecutive year of growth, driven by Japanese companies’ strong overseas investment activity, mergers and acquisitions, as well as valuation gains on foreign securities held by residents.

However, after losing the top position to Germany the previous year for the first time in 34 years, Japan has now also surrendered its position as the world’s second-largest creditor to China, slipping to third place in the global rankings.

Germany remained the world’s top creditor with 675.5 trillion yen in net external assets, followed by China at 636.3 trillion yen, according to ministry data based on figures from the International Monetary Fund.

Both Germany and China have seen their net external assets strengthened by consistent annual trade surpluses.

Japan, meanwhile, saw the growth of its net external assets constrained partly because its external liabilities also increased significantly.

This was driven by the strong performance of the Japanese stock market, which led to a 62.2 trillion yen upward valuation of Japanese securities held by non-resident investors.

News.Az 

By Nijat Babayev